Lawsuit Filed Against China’s Biggest Food Processor for Suspected Price Manipulation of Australian Wheat
ASIC is taking legal action against a Chinese Communist Party-owned company for allegedly manipulating wheat prices in Australia. The Australian Securities and Investments Commission (ASIC) has filed civil penalty proceedings against local subsidiaries of the China Oil and Foodstuffs Corporation (COFCO) for allegedly engaging in price manipulation on 34 occasions between January and March 2022.
The lawsuit, filed in the Federal Court, accuses COFCO International Australia Pty Ltd and COFCO Resources SA of manipulating the price of ASX24 futures for Eastern Australia Wheat in January 2023 (WMF3). ASIC alleges that the companies manipulated contracts by placing orders shortly before the close of the day session of the ASX24, affecting the daily settlement price for the WMF3 contract. Nicholas McGaw, a wheat trader at COFCO International Australia, is alleged to have made the offers late in the afternoon.
ASIC claims that Mr. McGaw emailed investment bank JP Morgan to protect the company’s short position on the contracts from another party attempting to raise the price. The alleged trades were valued at around $100,000 (US$65,000). The watchdog alleges that this practice distorts market conditions and erodes trust in the markets.
ASIC Chair Joe Longo stated that the companies engaged in a pattern of manipulation to benefit themselves at the expense of others in the market. He emphasized the importance of fairness in commodities markets, particularly in light of global supply chain disruptions and increases in the cost of living.
ASIC is seeking declarations and financial penalties against COFCO International Australia Pty Ltd and COFCO Resources SA. The matter will proceed to a case management hearing in the Federal Court.
The Epoch Times reached out to COFCO for comment. COFCO, founded in 1949 and based in Beijing, describes itself as a leader in the agricultural industry. The company’s core business includes agri-products such as grain, oil, sugar, cotton, meat, and dairy, along with segments in food, finance, and real estate. COFCO has been expanding globally to ensure a stable global supply chain.
