Seems related to the issue we have been following. Thx to Ray.
China's State-owned Assets Supervision and Administration Commission said on Monday it would support government-run firms that take legal action over heavy losses suffered due to bad derivatives deals. The regulatory watchdog said some firms had already notified foreign banks that they were considering legal action over contracts for oil-related structured options. The remarks came about a week after a report said Chinese state-owned enterprises may default on commodities contracts they have signed with foreign banks to cut massive losses from derivatives deals. "The move is a justified action to safeguard one's rights and interests in the commercial context," the agency said in a statement sent to AFP, without naming the firms or foreign banks involved. "SASAC is giving great attention and support (to this) and the relevant trade counterparties should cooperate," it said in the statement. The agency added it was conducting an internal investigation into oil-related structured option deals. "(We) support companies' efforts to cut their losses as much as possible... through negotiation and managing their positions through legal means and reserving the right to take legal action," it said. The agency ordered state firms in March to reconsider their derivative investments overseas and back out of high-risk contracts after several Chinese firms reported huge losses. State-owned carriers Air China, China Eastern and Shanghai Airlines have reported losses of almost two billion dollars since last year on aviation fuel hedging contracts. Late last month, Caijing magazine reported, citing an unnamed state enterprise executive, that only 31 state-owned firms were licensed to enter into such deals, while many more were apparently doing so.
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