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Old 08-24-2015, 08:12 AM   #1
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Angry investors capture head of China metals exchange

this is the new exchange set up in 2011. it sells silver and maybe 12 other metals.

dude is in trouble because of no inventory.


So- a while back- we thought china was going to expose the silver and prices would go up- here we are- the china are as arrogant and as selfish as us americans


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Angry investors capture head of China metals exchange

s

Mr Shan

Shan Jiuliang is manhandled by investors

The head of a Chinese exchange that trades minor metals was captured by angry investors in a dawn raid and turned over to Shanghai police, as the investors attempted to force the authorities to investigate why their funds have been frozen.

Investors have been protesting for weeks after the Fanya Metals Exchange in July ceased making payments on financial investment products. The exchange, based in the southwestern city of Kunming, bought and stockpiled minor metals such as indium and bismuth, while also offering high interest, highly-liquid investment products from its offices in Shanghai and its financing branch in Kunming.



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Troubles at the exchange are one of many factors contributing to turbulence in China’s financial markets, as a slowing economy exposes the weaknesses of the country’s debt-driven growth.

Some investors flew in from faraway cities to join hundreds more surrounding a luxury hotel in Shanghai before dawn on Saturday. When Fanya founder Shan Jiuliang attempted to check out, they manhandled him into a car before delivering him to the nearest police station.

Shanghai police took Mr Shan into custody and promised to work with local authorities in Yunnan province to investigate what has happened to investors’ money. They later released him without charge.

The demonstrations in Shanghai and Kunming and the exchange’s unusual accumulation of several years’ supply of some metals have so far failed to attract much public attention from regulators. A report by the local regulator identifying the exchange as one of the bigger investment risks in Yunnan was redacted to remove reference to Fanya late last year.

The exchange began to experience liquidity problems this spring. Fanya is estimated to hold several years’ supply of minor metals used in some high-tech and military applications, which it purchased at above-market prices. The exchange’s travails are pressuring prices for some of these metals, as traders anticipate it will have to sell its stockpile.

The exchange, which has acknowledged it has problems, is backed by several of China’s minor metals miners. It has said it has found a buyer but won’t identify the company. Mr Shan “was deceiving us. He admitted to us that there is no buyout group,” said one disgruntled investor surnamed Gu, who participated in the rainy early morning raid.

Mr Shan has been holding regular meetings with exchange backers since problems first surfaced this spring and was on the way to Guangzhou for a business trip when captured. Among other businesses he heads the Hong Kong-listed animation studio Imagi International Holdings. He formerly led the Bohai Commodity Exchange, which traded iron ore among other products.

Fanya denounced the weekend’s raid. “Violent acts against president Shan and our employees or the disturbance of our work are destructive of our work around solving the crisis. This will only allow forces behind the scenes to profit and will greatly harm interests of all members,” it said on its website after Mr Shan’s capture.

Mr Shan has not responded to FT attempts to contact him. Many investors told the FT they were attracted to Fanya financial products because it advertised on CCTV, the national broadcaster. Despite its current problems its financial products are still promoted on the high-speed train from coastal city Tianjin to Beijing.

Additional reporting by Owen Guo
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Old 08-24-2015, 08:17 AM   #2
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We've talked quite a bit about various exchanges here in the forums, but the Fanya Metals Exchange wasn't one of them. I've never heard of that one.

If they are advertising on the TV, it sounds like they were a metals retailer and not a "true" exchange for institutional investors.
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Old 08-24-2015, 11:09 AM   #3
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People are always trying to scam other people, nationality, ethnicity, religion or gender are no boundaries for the behavior.
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Old 08-24-2015, 11:51 AM   #4
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The Chinese don't play games. I like this development people! They will deal with this guy accordingly. Apparently they dropped him off with the local magistrate after he informed the investors that their money was no longer accessible and that they could not redeem their shares as they had been "frozen". Angered by this, hundreds of them surrounded his hotel in an up-scale district, stormed the building, kicked in his door and carted him off.

I'd have paid money to watch that action in real time. I would hazard a guess and bet that they threw him a nice beating along the way as well.

There's a lot of scams being uncovered these days in China, as the markets come unglued. I'm sure we'll se scores of these stories in the coming weeks and months.
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Old 08-24-2015, 12:00 PM   #5
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Here in Blighty this kind of behaviour would get you arrested for kidnap .....

a much more serious offence than loosing a few digits ..... that probably weren't yours
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Old 08-24-2015, 02:37 PM   #6
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I'm all for a good dose of street justice, as long as they have the right guy. Of course even the courts get the wrong guy too.
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