"Chinese firm says won't pay Goldman on options losses

Comment #6

konane — Wed, 30 Dec 2009 14:56:26 GMT

Thanks Rick! Yes agree totally. Didn't pass the smell test for me years ago when they started talking about it. We've found in recent years government serves itself first then tosses out crumbs ... if there are any left. There won't be.

Comment #5

Rick G — Wed, 30 Dec 2009 13:41:01 GMT

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Comment #4

konane — Wed, 30 Dec 2009 04:26:39 GMT

"â€¢ Step forward, Mammon. (8): Passage of the Obama 'health care' legislation will self-evidently release a permanent flow of cash which will be ripe for diversion and use as the base for further reviving of the Fraudulent Finance derivatives carousel: which is the underlying object of the exercise. The bill is Leninist and far exceeds what Lenin had in mind, or his successors actually got round to implementing. TBARACK OBAMA FACES VETERANSâ€™ DAY DEADLINE TO COMPLY... [ More ]

Comment #3

JAP69 — Wed, 30 Dec 2009 03:07:59 GMT

All these money deals need to be brought out into the open for all to see the mess.

Comment #2

konane — Wed, 30 Dec 2009 02:04:14 GMT

$47 TRILLION LIEN AGAINST U.S. TREASURY AND FED SHOWDOWN TAKES A DECISIVE TURN AS THE CHINESE AND MI-6 TURN THE S<snip>W Monday 14 December 2009 02:30 http://worldreports.org/news/251_47_trillion_lien_against_u.s._treasury_and__fed TREASURY SECRETARY â€˜READ HIS RIGHTSâ€™ AND TAGGED FORMER TREASURY SECRETARY PAULSON FORCIBLY TAKEN BY MI-6 TO BERMUDA Wednesday 16 December 2009 07:00 http://worldreports.org/news/252_treasury_secretary_read_his_right... [ More ]

Comment #1

JAP69 — Wed, 30 Dec 2009 00:15:37 GMT

They would not be sore losers would they. Been smilin all the way to the bank if they came out the winner.<br

Original Blog Entry: "Chinese firm says won't pay Goldman on options losses

konane — Tue, 29 Dec 2009 22:52:21 GMT

Chinese firm says won't pay Goldman on options losses

BEIJING, Dec 29 (Reuters) - A small Chinese power generator on Tuesday rejected demands from a Goldman Sachs unit to pay for nearly $80 million lost on two oil hedging contracts, part of a long-running dispute over how China deals with derivatives losses.

Goldman Sachs (GS.N) was one of the foreign banks, along with Citigroup (C.N), Merrill Lynch and Morgan Stanley (MS.N), blamed by the state assets watchdog for providing extremely complicated and difficult to understand derivatives products. [ID:nPEK242617] Shenzhen Nanshan Power (000037.SZ) (200037.SZ) said in a statement that it received several notices from J. Aron Company, a trading subsidiary of Goldman Sachs (GS.N), for at least $79.96 million as compensation for terminating oil option contracts.

We will not accept the demand by J. Aron for all the losses and related interests, said Nanshan, in line with the stance it took last December.

We will try our best to negotiate with J. Aron and resolve the dispute peacefully...but the possibility of using a lawsuit can not be ruled out when talks fail, it added.

J. Aron told us in one notice that if we do not pay the money, they will reserve the right to launch a lawsuit and will not send us any further notice.

The State Assets Supervision and Administration Commission said in September that it would back state-owned companies in any legal action against the foreign banks that sold them oil derivatives, which resulted in losses when oil prices dived late last year. [ID:nPEK14474]

A Beijing-based Goldman Sachs corporate communication official declined to comment.

Nanshan said in October last year that two oil option-related contracts with J. Aron were signed by its officials without authorisation from the company. In December 2008 it said in a statement it had terminated the deals, and that it would not accept J. Aron's demand for payment.

LONG-TIME TUSSLE

Many Chinese firms, especially airliners, suffered huge losses from complex oil options trading last year as oil price collapsed to nearly $30 a barrel.

A senior official from SASAC revealed last month that 68 Chinese firms suffered net losses of 11.4 billion yuan ($1.67 billion) by October 2008 on call and put options signed with foreign banks.

So far no legal action has been taken and many lawyers and industry analysts believe that Chinese firms and their foreign banks are quite likely to settle their disputes privately or through arbitration, similar to a handful of previous cases in the mid-1990s.

Only 31 firms are authorised in China to trade derivatives directly in the overseas market and the regulators started strictly prohibiting others from such trading since early 2009 after losses were exposed.

SASAC said last month that it had suggested companies without overseas derivatives trading licences trade on the domestic market or through domestic financial institutions.

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