Mitsubishi Corporation sustains a $90 million loss due to suspected metal market fraud in China

Mitsubishi Corporation, a Japanese trading house, has suffered a loss of over 600 million yuan ($82.8 million) due to unauthorized trades made by a Shanghai-based copper trader, Gong Huayong. Gong, a Chinese national, was dismissed by the company after an investigation found that he had made unauthorized trades with local companies, including some that were related to him. The losses were primarily caused by Gong’s actions, which included allowing certain local companies to defer payment for copper concentrate and refined copper. Mitsubishi has filed a criminal complaint and will cooperate with authorities. The company’s Chinese employees are concerned that they may bear the brunt of any fallout. This is not the first trading scandal to hit Mitsubishi, which has previously suffered losses due to rogue traders. The company has reiterated its full-year profit guidance, but the latest scandal is likely to make it even more cautious in its trading activities.