Australian regulator sues 2 Chinese-owned commodity firms for futures market manipulation
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July 25 (Reuters) -Australia's securities regulator said on Thursday it has sued two Chinese-state owned commodity-linked companies, alleging they manipulated the ASX24 market for Eastern Australia Wheat futures January 2023 (WMF3) contracts.
The Australian Securities & Investments Commission (ASIC) alleged that COFCO International Australia and COFCO Resources, units of Chinese-state owned food processing operation COFCO Corp, manipulated price of wheat contracts 34 times between Jan. 17, 2022 and March 3, 2022.
COFCO International Australia was not immediately available for comment.
ASIC alleged that COFCO placed orders for WMF3 contracts shortly before the close of the day session of the ASX24 to manipulate the closing price of the contract. This practice is commonly called 'marking the close'.
This caused "price for WMF3 contracts to not reflect the forces of genuine supply and demand in an open, informed and efficient market," anong others, the regulator said.
"We allege these companies engaged in a repeated pattern of manipulation to benefit themselves to the detriment of other participants in the market," ASIC Chair Joe Longo said.
ASIC is now seeking declarations and pecuniary penalties against both COFCO International Australia and COFCO Resources, it said.
Reporting by Echha Jain in Bengaluru; Editing by Sherry Jacob-Phillips and Michael Perry
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