China Banks Said to Have $3.2 Billion Exposure in Qingdao Probe

Chinese banks have about 20 billion yuan ($3.2 billion) of exposure to companies at the center of a loan fraud probe in the eastern city of Qingdao, two government officials said today, citing the latest findings of an official investigation.

Bank of Communications Co., China’s fifth-biggest lender, has also filed a lawsuit against the companies, Dezheng Resources and Decheng Mining, said the officials, who asked not to be identified because they aren’t authorized to speak publicly. Decheng Mining pledged the same metals stockpile three times over to obtain more than 2.7 billion yuan of loans, a person briefed on the matter said earlier this month, citing preliminary findings of an official investigation.