Commerzbank Fined 650,000 Euros for Deals With Defunct Cypriot Bank

Canada Restricts Dealings With Hong Kong Over New Security Law

OTTAWA—Foreign Affairs Minister Francois−Philippe Champagne says Canada is suspending its extradition treaty with Hong Kong as part of a package of responses to the new security law China has imposed on the territory. In a statement, Champagne says Canada will also treat sensitive goods being exported to Hong Kong as if they were being sent to mainland China. That means outright banning some military−related goods from being traded there. China imposed strict new controls on Hong Kong this week, in what Champagne calls a violation of the “one country, two systems” philosophy that was supposed to last 50 years after Britain returned Hong Kong to China in 1997. Champagne’s statement says Hong Kong’s place in the global economy was based on that promise and needs to be reassessed. Canada’s moves…

Cyprus’s securities regulator on Friday imposed a 650,000-euro ($730,800) fine on Germany’s Commerzbank for its role in transactions carried out by a local bank that collapsed during the country’s 2013 financial crisis.

The country’s CySEC commission said Commerzbank had been sanctioned over investment operations conducted by the now-defunct Laiki鈥攁lso known as Cyprus Popular Bank鈥攊n 2011, following Laiki’s merger with Greece’s Marfin-Egnatia Bank.

Commerzbank declined to comment on the case, which followed an eight-year probe by Cypriot authorities.

The investigation, which was launched following calls by left-wing AKEL lawmaker Irene Charalambides, looked into whether the Cypriot deals may have broken laws prohibiting a company from buying its own stock.

CySEC said Laiki invested in two structured products issued by Commerzbank in 2008. Marfin-Egnatia, which was at that time a Laiki subsidiary, was an index sponsor responsible for the composition of the portfolio.

As a result of the 2011 merger between Laiki and Marfin-Egnatia, Laiki became the index sponsor, creating a conflict of interest, CySEC said.

It said Laiki and Commerzbank acted in “concert” to manipulate the market in relation to Laiki shares on several occasions in April and May 2011.

CySEC said it had not fined Laiki because it is in administration and did not want to put an additional burden on former depositors, bond holders and shareholders.

Laiki, once Cyprus’s second-largest bank, was taken into administration and wound down under terms of a 10-billion-euro ($13.56 billion) international financial assistance package to Cyprus in March 2013.

Some 4.3 billion euros in uninsured deposits exceeding the EU threshold of 100,000 were wiped out, and thousands of people lost their life savings.

Charalambides said she felt vindicated by the result of the investigation.

“The resolution authority should consider the possibility of civil lawsuits against Commerzbank to ensure that the funds channelled to these structured bonds, with the objective of manipulating shares, be returned, and given to depositors whose funds were subjected to a haircut,” she said in a statement.

By Michele Kambas

Focus News: Commerzbank Fined 650,000 Euros for Deals With Defunct Cypriot Bank

Nasdaq-Listed Chinese Company Cheated Creditors by Using Fake Gold as Loan Collateral

Nasdaq-listed Chinese jeweler Kingold Jewelry Inc. (KGJI) has received 20 billion yuan ($2.8 billion) loans by claiming to use tons of gold as collateral in the past five years. However, the creditors discovered that some of the gold bars are gilded copper alloy. The loans were protected by insurance issued by Chinese state-run PICC Property and Casualty Company (PICC) and some smaller insurers. But the insurers refuse to pay for the loss of Kingold’s creditors by claiming that the insurance contracts defined that they won’t take care of the loss that was created by the policyholder. However, the creditors emphasized that the insurance agreement ruled that insurers will take responsibility if the gold that is supplied by the policyholder doesn’t meet the standard. Kingold designs and manufactures jewelry. It was…