(Bloomberg) — Executives at one of China’s largest copper trading houses have lost contact with the company’s founder and believe that he has been detained by police for questioning, according to people familiar with the matter.
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He Jinbi founded and built Maike Metals International Co. into China’s biggest importer of refined copper before a liquidity crisis last year brought the company to its knees. Colleagues haven’t heard from him for at least a day, and have been informed that he was taken away by police for interviews in his home province of Shaanxi, the people said, asking not to be identified as the matter is sensitive.
The people didn’t give a reason for He’s detention. Maike and He have been the focus of legal action by creditors since the company ran into difficulties last year during China’s extended Covid lockdowns, when it began experiencing difficulties paying for purchases. Bloomberg reported last September that its trading activity had largely ground to a halt.
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Multiple attempts to contact He and his family by phone calls and text messages weren’t successful. Maike declined to comment in an email. The Shaanxi Provincial Public Security Department didn’t respond to a fax seeking comment.
Maike until recently was responsible for a quarter of China’s copper imports — making He one of the sector’s most powerful players — and its downfall has sent tremors across the industry.
In recent years, China’s leadership has not hesitated to go after high-profile business figures, especially when empires falter and consumers are caught in the crossfire. Hui Ka Yan, the billionaire chairman of beleaguered property developer China Evergrande Group, was taken by police last month and placed under residential surveillance. Chen Feng and Tan Xiangdong of HNA Group Co, a once-high flying conglomerate whose debt-fueled acquisitions became an early symbol of corporate excess, were detained in 2021.
Executives can be held as targets themselves or to help with investigations into others. Detention does not mean they will be charged. Guo Guangchang, of the debt-laden Fosun conglomerate, briefly disappeared in 2015. After assisting police, he returned to work.
He Jinbi founded Maike with a group of friends in 1993, and started out trading mechanical and electrical products before shifting focus to copper. With a wide network of friends and business contacts, He built Maike into a vital conduit between big international traders and Chinese consumers, to feed the country’s insatiable appetite for raw materials during the 2000s commodity supercycle.
His deep connections through the real economy helped him make bold and successful bets on the future of the copper market, and he was a pioneer of China’s cash-for-copper trade, borrowing against the massive volumes of metal he was shipping and storing in warehouses. In the 2010s, Maike expanded into China’s booming real estate sector, investing in the hotels and business centers that would later be left empty for months during China’s extended Covid lockdowns, contributing to last year’s liquidity crisis.
Then this February, Maike filed a request to a court for “preliminary restructuring” as it sought to start trading metal again. However its continued absence from the market has weighed on liquidity in China’s copper trade.
He was sued this year by ING Groep NV in Hong Kong over $147 million in unpaid debt. The case involved overdue payments owed by a trading arm of Maike, according to court filings. Maike has previously declined to comment about the case.
–With assistance from Winnie Zhu and Jack Farchy.
(Update to add context in 6th-7th paragraph)
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