Fanya Metal Exchange founder gone missing
Shan Juilang, the chairman and founder of the Fanya Metal Exchange has gone missing, presumably caught up in Beijing’s three-year old anti-corruption dragnet.
Fanya located in Kunming in the southwestern province of Yunnan, traded in minor metal and investors have been protesting the exchange and the local government since April when more than $6 billion worth of investments in a product that promised double digit returns were frozen.
Stockpiled metals including copper and nickel and even iron ore inventories are used in China’s shadow banking system – usually as collateral for trade credit but also as part of high-yielding asset management products like those Fanya offered or currency carry trade deals.
The exchange’s website is inaccessible and another company controlled by Shan only reported that they had “lost contact” with him.
The FT points out that China “has no habeas corpus law and people can be legally detained for six months or longer without charge and without the right to see either families or lawyers”:
“Less clear is what has happened to the metals stockpiled by the exchange, which tried to set benchmark prices far above market prices. Backed by miners, it also lobbied for China to build strategic reserves in the metals it traded.”
Fanya trade traded antimony, germanium, gallium, wolfram, indium, silicon, cobalt and bismuth and amassed huge stockpiles of the minor metals. For example Fanya’s indium stockpiles at last count was put at 3,600 tonnes which compares with annual global consumption in cellphones, televisions and solar cells of less than half that.
Image: Strategic Metal Report