By Archie Hunter / September 24, 2018 / www.metalbulletin.com /
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[Updating with additional detail on Kyen Resources expansion, Shenzhen Feima difficulties, context of Chinese ownership of physical metals traders, and clarifying that Viant Commodities is 40% owned, not fully owned by CNFPC]
Kyen Resources founder and managing director Victor Kuo has left the Singapore-based trading house, sources with knowledge of the matter told Metal Bulletin.
Kuo, who
set up Kyen in 2014 and built it into a major trader of refined metals in Asia and latterly in Europe, departed last week after a disagreement with the company's board of directors on how to manage the foreign business.
The board, which is manned heavily by directors from Kyen's owner, China's Shenzhen Feima International Supply Chain, was not willing to finance further expansion at the trading house, and is experiencing financial difficulties itself, sources told Metal Bulletin.
Kyen Resources and Victor Kuo both declined to comment when contacted by Metal Bulletin.
Trading of shares in Shenzhen Feima was suspended on August 21 - the stock is down 47% in the year to date at ?6.53 per share, caught up in a collapse in Chinese equities.
The company was going through a "major asset restructuring plan," a notice on the Shenzhen Stock Exchange said at the time.
Part of this asset restructuring involves the company's overseas assets, which includes Kyen Resources, two sources said.
"Kyen is no longer a priority for them," a source with knowledge of the matter said.
As things stand, there has been no formal resolution on Kuo's replacement or the future direction of the company, two sources said.
Rapid expansion
Kyen Resources came to prominence when it acquired the remaining metals book from
energy-focussed Gunvor, which exited metals in 2016.
Under management from Kuo, it opened an office in South Korea, taking advantage of the aluminium market's structural move to increase stockpiles there and in China, the world's largest importer of industrial metals.
This January,
Kyen opened an office in London, predominantly to trade aluminium in Europe.
Many metals traders now owned by Chinese companies
Kyen Resources is one of several major metals trading houses now backed by Chinese companies, part of a broader trend of overseas expansion from cash-rich Chinese business in recent years.
This year Louis Dreyfus sold its metals division (
now IXM) with the world's third largest trading book to the NCCL Natural Resources Investment Fund for $466 million.
And last year Chinese conglomerate HNA bought warehousing and logistics company CWT for $1 billion and with it the storied MRI, a major merchant in metals concentrates.
Viant Commodities, headed up by former Gunvor traders, is 40% minority-owned by China National Forest Products Corp, a state owned enterprise.