South Africa’s Standard Bank said on Thursday it took an $80 million writedown from its exposure to a suspected metal financing fraud in China.

Chinese authorities launched an investigation in May into whether metals trading firm Decheng Mining and related companies used fake warehouse receipts at Qingdao port to obtain multiple loans secured against a single cargo of metal.

Africa’s largest lender, reporting earnings on Thursday, said it had taken an 854 million rand ($80 million) “valuation adjustment” against financing agreements known as repos related to physical aluminium held in warehouses in China.

“There is emerging evidence that the financing arrangements were impacted by fraudulent activities in respect of the physical aluminium,” the bank said in its first-half results statement.

The writedown against the repos represented management’s “best estimate of the risk adjustment required”, Standard Bank said in its release.

The bank, which says it has already started legal proceedings over its rights to the physical aluminium, said its total exposure related to the Chinese port was $167 million.

Chinese state media said this month that police are investigating the death from unnatural causes of the deputy commissioner of customs at Qingdao port.

- Reuters