British bank sues tycoon for $35m amid fraud claims

Standard Chartered, which is UK-based, is suing Chen Jihong for $35.6 million
Standard Chartered, which is UK-based, is suing Chen Jihong for $35.6 million
BOBBY YIP /REUTERS

Standard Chartered has launched a legal attack on the Chinese tycoon at the centre of a “missing metals” fraud scandal that has hit commodities trading at one of the world’s busiest ports.

The UK-based bank said that it was suing Chen Jihong for about $35.6 million (£21.8 million), joining a mêlée of banks and trading houses scrambling to calculate their exposure to what appears to be a massive fraud — and then to try to recoup their losses.

The scandal, sources say, is among the more troubling by-products of China’s so-called “shadow” financial industry, a largely legitimate set of mechanisms that have flourished in an environment where private companies have trouble borrowing from banks.

One practice has been to use individual shipments of metals, particularly