China's Chinalco suspends bill issue-underwriters

Chinese aluminium giant Chinalco has indefinitely suspended a planned issue of 3 billion yuan of five-year corporate bills, the banks underwriting the issue said on Friday.

The company, which is the parent of Aluminum Corp of China <601600.SS>, suspended the sale because it needs to clarify rumours that could affect investors' behaviour, said Industrial Bank <601166.SS> and China Construction Bank Corp <601939.SS>.

In a brief statement, the banks did not describe the rumours. The bill sale was to have ended on Thursday. Bill traders said they believed the suspension was related to a report in Britain's Telegraph newspaper, which said shares owned by Chinalco in Rio Tinto were stuck in a custodial account for failed Lehman Brothers in Hong Kong.

Chinalco said in a statement on Thursday that it believed there was no basis under which its ownership of shares in Rio Tinto could be challenged.

The newspaper report said Chinese authorities were trying to move the shares to another custodian. It said the shares were worth $8 billion.

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