The Qingdao imbroglio has finally been brought to a close today, with a ruling by the Qingdao Intermediate People’s Court, seen by Reuters, sentencing the chairman of the company at the centre of the 2014 Chinese metal warehousing scandal to 23 years in prison. His company, Dezheng Resources, has also been ordered to pay a Rmb3.012bn (US$435.7mn) fine.

Chen Jihong, who founded the company in 2004, was found guilty on five counts of financial crimes spanning an 18-month period from November 2012 to May 2014. According to the court statement, his firm raised Rmb12.3bn (US$1.78bn) in funds using either fake warehouse receipts or fake certificates for aluminium ingots, alumina and refined copper at the eastern Chinese ports of Qingdao and Penglai, and raised Rmb3.6bn (US$520.8mn) in loans, letters of credit and bank acceptance bills from 13 banks by repeatedly using the same cargoes as pledged collateral.

The case, which rocked the commodity trading world, led to combined international losses thought to run in excess of US$1bn, and left Chinese banks exposed by upwards of US$3bn. While Citi and trader Mercuria were the most visible victims – eventually reaching a settlement in 2016 as they argued over who was responsible for the estimated US$270mn in potential losses stemming from the fraud – other big names including Standard Bank, Standard Chartered, HSBC, Glencore and Trafigura were also exposed.

Speaking to GTR in the wake of the drama, Linos Choo, a litigation specialist at law firm DLA Piper, said that the case had led to a surge of metal leaving Qingdao and other Chinese ports to “safe haven” destinations amid fears that fraud was more widespread than had been acknowledged previously.

This court ruling now brings the Chinese authorities’ investigation into Dezheng’s multiple warehouse receipts to a close, drawing a line under one of trade’s most infamous fraud cases, but whether lessons have – or indeed can – be learned from what happened is another story.

Anecdotal evidence from the market shows that the case led to a more conservative approach to financing. However, although the metals warehousing industry has made a push to go digital since the deception, Choo cautions that cracking down on this type of fraud is all-but impossible, given that the Qingdao scandal likely involved collusion between the Chinese metals supplier and employees of the port authority or its agents.