(Recasts with China confirmation of detentions, traders, background)
By James Topham and Niu Shuping
TOKYO/BEIJING, April 24 (Reuters) - Three employees at one of Marubeni Corp's grain trading unit in China have been detained, Chinese customs said on Thursday, a move prompted by allegations of tax evasion on soybean imports.
The three local staff worked at a Chinese unit of Marubeni's Columbia Grain, Inc, the Japanese trading house and Chinese customs in the port city of Qingdao said.
The detentions could add to recent pressure on soybean prices after a wave of soybean cargo defaults in China, where a combination of poor crushing margins and difficulty getting credit has led to a spike in rejected cargoes.
U.S. soybean futures hit their lowest since April 14 on Thursday, on concerns about defaults by top buyer China, which buys more than 60 percent of global imports. The market has lost 3.5 percent in five straight losing sessions.
The customs authority in Qingdao said the three employees were being detained on suspicion of smuggling. Chinese customs sometimes use smuggling as a broader term for tax evasion.
Industry sources said the allegations could be related to discrepancies on the reported valuation of imported soybean cargoes, which would affect customs duty and value-added tax, since both are levied based on the cargo values.
"People are wondering if the Chinese authorities are now clamping down on the use of soybeans as a form of shadow currency," one German trader said, referring to the practice of using commodities as collateral for loans. "This use of soybeans may have inflated Chinese soybean imports recently despite slack Chinese domestic demand."
Traders said the investigation appeared to be limited to Marubeni and a local importer for now, prompting speculation that it could have been instigated by a tip off from a business rival in part to help cash-strapped buyers delay shipments.
International firms selling beans and grains into China said their business had not been affected and that the investigation was unlikely to spread.
The probe into Marubeni's China unit comes days after the seizure of a bulk carrier owned by Japan's Mitsui O.S.K. Lines Ltd in a case related to a wartime claim. Mitsui has paid almost $30 million to Chinese claimants and the ship was released, a Chinese court said on Thursday.
The seizure of the vessel comes amid escalating tensions between China and Japan over a chain of uninhabited islands both countries claim. The impoundment has set off alarm bells in Japan and the country's top government spokesman warned this week it may damage Japanese business in China.
PLOY TO PRESSURE PRICES?
Two sources, including one with direct knowledge of the matter, said one of the Marubeni staff being held is Zhang Wenjing, a trading executive with Columbia Grain.
Her detention followed tip-offs to customs alleging that the company together with a local crusher were involved in evading taxes for soybean shipments, the sources said.
"The customs received a tip-off that the company was suspected of evading taxes and smuggling by using provisional prices," said one of the sources, who has close business dealings with Marubeni.
Some industry analysts said the tip-off targeting Marubeni could be part of a ploy aimed at pressuring soybean prices.
"Distressed cargoes sailing to China could then be bought by Chinese buyers at a discounted price," said an industry analyst who declined to be identified.
The investigation comes nearly a year after China raided GlaxoSmithKline's offices in the country and detained four executives on suspicion of bribery and tax fraud.
A 2010 crackdown by Beijing targeting wrongdoing in iron ore trading resulted in four staff of Rio Tinto being jailed for bribery and stealing state secrets.
DECLARED CARGO VALUE
Discrepancies in the reported valuation of imported cargoes are a common occurrence in commodity trade, including soybeans, as sellers typically offer Chinese buyers a delayed pricing mechanism that allows importers to place orders based on a preliminary price.
This provisional pricing would be used to calculate cargo value when making customs declarations.
Buyers are then able to fix prices based on futures prices on the Chicago Board of Trade when cargoes arrive in China or as late as a month after their arrival. This final price would be the actual valuation of the cargo.
Since U.S. soy prices are up more than 12 percent so far in the year, companies may have under-reported the actual value of the cargo, said the trade source.
One Singapore-based trader with an international firm said it was unlikely Marubeni would deliberately help buyers evade taxes.
"Marubeni has several second- and third-tier customers who could have reported lower values," he said.
China's customs authority is familiar with the practice of delayed pricing in commodities trade and has provisions in place allowing companies to adjust the declared cargo value, industry sources said.
"Delayed pricing has been widely used in the industry, we don't know how serious customs authorities will be in handling the case this time," said a China-based trader.
Chinese buyers have threatened to default on more than 20 cargoes, which have not yet been priced, to avoid incurring losses in a depressed local market. (Additional reporting by Kunihiko Kichise in TOKYO, Naveen Thukral in SINGAPORE and David Stanway in BEIJING, Christine Stebbins in CHICAGO and Michael Hogan in HAMBURG; Writing by Aaron Sheldrick and Fayen Wong; Editing by Alex Richardson, Amran Abocar and Ed Davies)
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