Zero Hedge and Reuters have now reported that the inventory scandal, originally isolated to the port of Qingdao, has now spread to the port of Penglai. The scandal has to do with collateralized commodities stockpiles used to fund China's 'shadow banking' system. Foreign banks now fear that private Chinese companies used the metals to get several loans. The Wall Street Journal has reported that the following banks are involved: Citigroup, Standard Chartered, Standard Bank, ABN Amro Bank, BNP Paribas, and Natixis. Zero Hedge (quoting a Goldman Sachs document) reports that LC issuance (Letter of Credit) could be between 10 to 30 times the value of physical metal present.