Maike Metals International Co. Founder’s Disappearance Raises Questions in the Copper Industry
Analysis of He Jinbi’s Role and the Impact on the Copper Market
In a development that has sent shockwaves through China’s copper industry, executives at one of the nation’s largest copper trading companies have reported losing contact with the firm’s founder. They suspect that he has been detained by police for questioning, according to individuals familiar with the situation.
He Jinbi, the visionary behind Maike Metals International Co., transformed the company into China’s premier importer of refined copper. However, a liquidity crisis in the previous year severely battered the firm. Colleagues have had no communication with him for at least a day and have been informed that he was taken into police custody for questioning in his home province of Shaanxi. These individuals, who requested anonymity due to the sensitivity of the matter, did not provide a specific reason for He’s detention.
Legal Battles and Financial Woes
Maike Metals International and He have been entangled in legal disputes with creditors since the company faced severe challenges during China’s extended Covid-19 lockdowns last year. During this period, the company grappled with difficulties in meeting its purchasing obligations, as previously reported by Bloomberg in September of the same year. Trading activities had come to a near standstill.
Numerous attempts to establish contact with He and his family through phone calls and text messages have proven fruitless. When approached for comment via email, Maike declined to respond. The Shaanxi Provincial Public Security Department did not reply to a fax seeking clarification.
Maike Metals International had, until recently, been responsible for a substantial quarter of China’s copper imports, solidifying He’s position as one of the sector’s most influential figures. The company’s downfall has reverberated across the copper industry, introducing considerable uncertainty.
High-Profile Business Figures
In recent years, Chinese authorities have not hesitated to target prominent business personalities, especially when their corporate empires falter, leaving consumers and investors caught in the crossfire. Notable examples include Hui Ka Yan, the billionaire chairman of the embattled property developer China Evergrande Group, and Chen Feng and Tan Xiangdong of HNA Group Co., a once-prominent conglomerate with debt-fueled acquisitions.
Executives may be detained either as subjects of investigation or to aid in investigations concerning other individuals or entities. It is important to note that detention does not automatically lead to formal charges. For instance, Guo Guangchang, the chairman of the debt laden Fosun conglomerate, briefly disappeared in 2015 but later resumed his responsibilities after assisting the authorities.
He Jinbi founded Maike in 1993 alongside a group of friends, initially specializing in the trade of mechanical and electrical products. Later, he shifted the company’s focus towards copper trading. With an extensive network of business contacts, He played a pivotal role as a conduit between international traders and Chinese consumers, satisfying the nation’s insatiable demand for raw materials during the commodity supercycle of the 2000s.
Market Evolution and Challenges
He leveraged his profound connections within the real economy to make bold and successful predictions about the copper market’s future. He was a trailblazer in China’s cash-for-copper trade, utilizing the vast quantities of metal he transported and stored in warehouses as collateral for borrowing. In the 2010s, Maike expanded its footprint into China’s burgeoning real estate sector, an endeavor that would eventually contribute to last year’s liquidity crisis when these properties remained vacant for months during the extended Covid lockdowns.
Ongoing Legal Battle
Notably, Maike and He faced legal action this year, with ING Groep NV in Hong Kong pursuing a lawsuit over $147 million in unpaid debt. The case revolved around overdue payments linked to a trading division of Maike, as detailed in court records. Maike has previously refrained from commenting on this legal dispute.
The enigmatic disappearance of He Jinbi and the legal entanglements of Maike Metals International Co. have introduced significant uncertainty into China’s copper industry, raising questions about the future of the company and its founder.