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PLA takes over aluminum & copper reprocessing company

 I genuinely thought this story was completed and utter bullshit.

A relatively large Shanghai based aluminum and copper reprocess company, basically taking old aluminum and copper and recasting it for use in industrial processes.   Nothing sexy about this business, about as boring as it can be, 100% of its input are local.   All its labour is local, all its revenues are local, the aluminum and copper are sold the users less than 20 km from the plant.   This company could not be any more Chinese.  All its expenses and all its revenues are in Yuan...

A month ago, the PLA took over the plant for "unpaid taxes on foreign revenues and for using transfer pricing to avoid Chinese taxes".   This sounds insane and frankly like disinformation because it is so evident.  The company was created 25 years ago, to deal with the local metal waste, that was not steel.  The owner and CEO had previously been an electrician, so he understood the material.

Yesterday, I met the ex-CEO.   The PLA gave him an offer he could not refuse.   In exchange for his "freedom" he was allowed to sell the company for a bunch of IOUs and some cash.  Needless to say that I am not currently in the United Kingdom.   Turns out the man is a client of my ex-firm.   He did very well especially in the early years when he was the only game in town.   What changed?  The distressing part of the conversation was that the company had, since Covid, been breaking even, additional competition and a massive reduction in the waste aluminum and copper (which tells another story about China).   So selling the business that was marginally profitable was a blessing in disguise for the man, especially since he obtained a coveted exit visa.

Officers in the PLA have acquired funds in a less than ethical way, and in order to remove the evidence they have been using these funds to purchase Chinese companies.   The owner only speaks Mandarin, so his foreign options are limited.   The PLA officer took over the business not only to hide their il gotten gains but also to be able to leave the army and avoid unpleasantness as Chairman Xi's massive "reform" of the army continues.   

Interesting, three pieces of information (a) The Xi purge of the PLA is a real thing, (b) that industrial production is well off its peak (c) The seizure of companies has moved beyond the "foreign lackeys" stage to anything that moves stage


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