China has accused several foreign investment banks of "maliciously" selling derivative products to dozens of state-owned companies, which then booked more than 11 billion yuan in losses on the deals.
The losses were "closely associated with the intentionally complex and highly leveraged products that were fraudulently peddled by international investment banks with evil intentions," said Li Wei, vice chairman of the State-Owned Assets Supervision and Administration Commission (SASAC).
"To some extent some international investment banks were the chief culprits and the root of ruin for the Chinese enterprises who encountered this financial derivatives Waterloo."
Li singled out Goldman Sachs, Merrill Lynch, Morgan Stanley and Citigroup in the article published in the latest edition of the Study Times, an official Communist Party newspaper.
He said 68 of the more than 130 companies controlled by SASAC bought derivatives to hedge against rising commodity prices and fluctuating exchange and interest rates.
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