He Jinbi, the founder and chairman of Maike Metals International, a prominent commodities trader in China, has recently gone missing and is believed to be in police custody, according to sources familiar with the matter cited by Bloomberg. Colleagues have not been able to contact Jinbi for several days, and it is reported that he was taken in for questioning by the police in his home province of Shaanxi. The exact reasons for his detention are currently unknown.
Maike Metals International and Jinbi have faced legal challenges over the past year, particularly regarding their ability to pay for imported copper. The company, which is responsible for a significant portion of China's copper imports, has been severely impacted by the Covid-19 lockdowns, the property market downturn, and the overall economic slump. These difficulties highlight the struggles faced by one of China's largest commodity trading houses as the global commodity market experiences a downturn. Additionally, banks have become more cautious about lending to the commodity sector, further adding to Maike's financial pressures.
In an interview last year, Jinbi acknowledged the liquidity difficulties faced by the private sector, including Maike, and mentioned that the company was selling assets and equities to improve liquidity and reduce debt. He described the situation as "breaking arms to survive," indicating the sacrifices being made to avoid bankruptcy.
Maike's absence from the market has had an impact on liquidity in China's copper trade, and the company filed for a court-led restructuring in February to restart its copper trading operations. Furthermore, Jinbi has been sued by ING Groep NV for unpaid debt amounting to $147 million. The combination of short-term obligations and an illiquid property portfolio has made it challenging for Maike to raise additional capital.
The reasons behind Jinbi's detention by the police remain a mystery.