Chinese SOEs threaten legal action on commodity derivatives

At least three state-owned enterprises (SOEs) with outstanding commodity derivatives contracts with six foreign investment banks have sent their banking counterparties a letter stating they reserve the right to pursue legal actions against these banks if these bilateral derivatives contracts are proven illegal.

Banking sources in Beijing told Asia Risk the letter was sent by a law firm representing these SOEs, which included Air China, China Eastern and Cosco Group. But these sources believe the

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