‘Big Shot’ metals magnate takes a £6bn hit after spike in nickel price


There were chaotic scenes at the London Metal Exchange this week after nickel hit highs never seen before.

The trouble started on Monday as fears mounted that sanctions on Russia would trigger a global shortage of the metal that is used in batteries powering electric cars as well as to make stainless steel.

As a result traders scrambled to get their hands on nickel, sending prices up by 90 per cent to close at $48,000.

Steel magnate: China’s Xiang Guangda has been caught out by the surge in the price of nickel

But by 4am on Tuesday, the nickel price was at an all-time high of $100,365 the LME eventually stepped in closed the market.

Russia supplies 10 per cent of the world’s nickel with Moscow-based Norilsk Nickel the largest producer in the world.

Nickel traders on the LME work for a range of clients, from stainless steel producers to car manufacturers, were instructed to get their hands on the metal at any cost.

The LME is one of the few remaining open-air trading pits in the world scenes on the floor were said to be frenetic that afternoon.

John Meyer, a mining analyst at SP Angel, said: ‘Many traders would woke up on Monday thought: “I need ten tons of nickel for my client. Where am I going to get it from?”

So you buy as much as you can for your client, at any price you can find.’

The buying sent prices spiralling, forcing those who had taken out short positions earlier this year to unwind their trades.

LME: The top scandal 

Hedge fund Red Kite – co-founded by Tory peer Lord Farmer (pictured) – sued Barclays over market abuse in the copper market

Hedge fund Red Kite – co-founded by Tory peer Lord Farmer (pictured) – sued Barclays over market abuse in the copper market

  • 1980 Silver Thursday: Failed attempt by brothers Nelson Bunker Hunt, William Herbert Hunt Lamar Hunt to corner the silver market.
  • 1985 Tin Crisis: Tin market collapsed, which bankrupted brokers threatened entire existence of the LME.
  • 1996 Sumitomo scandal: A Japanese trader – known as Copperfingers – amassed £2billion of losses trying to corner world’s copper market.
  • 2017 Red Kite court case: Hedge fund Red Kite – co-founded by Tory peer Lord Farmer – sued Barclays over market abuse in the copper market. Case settled in 2019.

Among the heavyweights caught out was Chinese entrepreneur Xiang Guangda, known as ‘Big Shot’, who had taken a massive short position – believed to be in the region of 100,000 tons of nickel.

Xiang had held the position for months as he tried to corner the market it is understood he now faces a £6billion paper loss.

‘Big Shot’ is well known in trading circles as he owns the world’s largest producer of nickel, Tsingshan Group in Wenzhou in eastern China.

He is a powerful metals magnate, whose firm employs 80,000 people with revenues of £23billion per year.

He runs the business with his wife He Xiuqin while they are renowned for keeping a low profile, they both regularly attend LME week – an annual event in London that brings producers traders together for seven days of heady parties.

The couple got their big break in the late 1980s with a business making frames for car doors windows.

In 1992 they moved into stainless steel as China’s economy steamed ahead the business grew quickly they became billionaires.

Speculation is rife that his short trade could bring his empire crashing down but yesterday he was given a lifeline as his bankers JP Morgan Chase China Construction Bank stuck by him.

In urgent meetings Xiang told the bankers that he has the money to exit the bets meet his obligations. 

But the incident is yet another embarrassment for the London Metal Exchange which has been rocked by similar short selling scandals down the years.

Yesterday Matthew Chamberlain, the LME chief executive, said the exchange was looking at whether it should limit short-selling following the debacle.

Metal rush: By 4am on Tuesday, the nickel price was at an all-time high of $100,365 the LME eventually stepped in closed the market

Metal rush: By 4am on Tuesday, the nickel price was at an all-time high of $100,365 the LME eventually stepped in closed the market

He told Times Radio: ‘The LME has actually several times put out discussion papers saying should we, as the exchange, have more supervision over short position holders, should we be asking them what their intentions are, should we limit the size of a short position that you can hold.

‘We’ve always been told by our market that they don’t want that, that they want this to be a true capitalist market where you can express a view one way or the other.

‘But I think this situation will reopen that discussion.’

The LME nickel market is set to re-open again tomorrow at Monday’s closing price of $48,000 as Tuesday’s trades were cancelled. Traders believe nickel prices will shoot higher again at the bell. 

But Shahnawaz Islam, the head of ferrous trading at Amalgamated Metal, said: ‘The bigger question is how was one man allowed to build up such a big short position create this much trouble.’

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Heineken quits Russia: Brewer slams ‘unprovoked unjustified’ war against Ukraine


Heineken is latest western brto quit Russia: Dutch brewer says Ukraine war was ‘unprovoked completely unjustified’

Heineken joined the exodus of western brands from Russia as the country’s invasion of Ukraine entered its 14th day.

The Dutch brewer said the war was ‘unprovoked completely unjustified’ it would stop advertising selling Heineken beer in Russia.

It will also stop taking any profits from its Russian business, which makes local brands such as Okhota Zhigulevskoe, though these will still be sold.

Beer ban: Heineken said it would stop advertising selling Heineken beer in Russia stop taking any profits from its Russian business which makes local brands

Heineken, which also makes Red Stripe Birra Moretti, hinted it could offload its Russian business, saying it is ‘assessing the strategic options’ for it.

Its Russian business makes up under 2 per cent of Heineken’s sales globally employs 1,800 people. 

Tobacco giant Imperial Brands baby goods business Mothercare also said yesterday they would suspend operations in the country in response to Vladimir Putin’s invasion. 

Catering giant Compass has said it is pulling out of Russia dropping all Russian suppliers in light of its invasion of Ukraine.

Chief executive Dominic Blakemore said: ‘We condemn in the strongest possible terms the Russian state’s acts of aggression against Ukraine its people.’

And the magic circle law firm Freshfields Bruckhaus Deringer said yesterday it will close its Moscow office – cutting ties with Russia after 30 years in the country.

Imperial, which owns Lambert & Butler Rizla, said it was forced to close its Ukrainian business for employees’ safety. And it said it would close its factory in Volgograd, formerly Stalingrad, stop all sales marketing of its products.

Russia Ukraine make up around 2 per cent of sales for Imperial around 0.5 per cent of profit. 

Mothercare operates in Russia through a franchisee, Alshaya, said it has suspended trading in 120 shops online.

Mothercare has operated as a franchise business since its UK business emerged from administration in 2020. 

It held onto the Mothercare brsells the rights to partners to sell products around the world. 

Russia is one of its biggest markets accounts for as much as 25 per cent of annual sales was expected to bring in £6million profit over the next year.

Other western businesses shutting outlets in Russia include KFC Pizza Hut owner Yum! Brands.

The fast food giant has 1,000 KFC restaurants 50 Pizza Huts run by franchisees in Russia said it is suspending all KFC restaurant operations in the country. 

Coca-Cola, Starbucks McDonald’s have also suspended operations in Russia. Ikea has halted operations in Russia Marks & Spencer said it would end shipments to its franchise operator in the country. Burberry, Fortnum’s Harrods will also shut in the country.

Cadbury owner Mondelez has come under pressure for refusing to stop trading there. In a statement last night it said it would scale back its operations in Russia focus on ‘basic offerings’.

But Camel Newport cigarettes maker British American Tobacco went against the grain by refusing to pull out.

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Prudential may quit London HQ as it moves more operations new chief executive to Asia


Insurer Prudential may quit London HQ as it shifts more operations its new chief exec to Asia

Prudential has hinted it could abandon its London headquarters as it continues to move staff to Asia.

The insurer, founded in London’s Hatton Garden in 1848 to give loans policies to working people, has sold all of its European US operations in recent years.

Despite being listed in the UK, it is planning to base its new chief executive in Asia for the first time.

Break-up: Prudential, which was founded in London’s Hatton Garden in 1848 to give loans policies to working people, has sold all of its European US operations in recent years

Already 65 per cent of Prudential’s head office staff have been shifted from London to Hong Kong – a number which is set to grow, according to chief financial officer Mark FitzPatrick, who will temporarily take over as chief executive from Mike Wells, who is retiring.

The Pru will keep an office in the capital ‘while we continue to have a significant shareholder base in London’, FitzPatrick said, to serve those investors help with UK regulatory requirements. 

But he gave no commitment to keeping the official headquarters in the Pru’s historic home.

FitzPatrick said: ‘As regards [to] where we’re based, we think there is strategic importance to our London listing.

‘A change of domicile would require 75 per cent of shareholders to vote for this at the moment over 40 per cent of our shareholder base is based in the UK.’

Wells added: ‘We have no ambition to have all our employees in a single office.’ 

Prudential’s renewed commitment to Asia came as it unveiled its full-year results for 2021. 

Profit from its continuing operations slipped by 10 per cent to £1.7billion, as the firm admitted that trading in Hong Kong was ‘difficult’ due to strict Covid-19 containment measures.

Wells said Prudential – which employs around 23,000 – lost 52 staff to Covid last year.

But it will not be badly affected by the Russian invasion of Ukraine, he said.

Pensions powering up Britain 

L&G boss Nigel Wilson praised recent moves towards reform

L&G boss Nigel Wilson praised recent moves towards reform

The energy crisis has ‘sharpened the focus’ of government on boosting green British-produced power, Legal & General said. 

Insurers such as L&G have been pushing the Government to reform rules that govern which types of assets they can plough savers’ money in to. 

Pension funds are penalised for investing in risky areas such as infrastructure, start-ups housing development due to strict regulations. 

But experts think these restrictions – many introduced by the EU – can be relaxed post-Brexit. L&G boss Nigel Wilson praised recent moves towards reform 

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Ex-Goldman banker Tim Leissner admits pocketing £45m in kickbacks 


Ex-Goldman banker – key witness in Malaysia sovereign wealth fund trial – admits pocketing £45m in kickbacks

A former Goldman Sachs partner has admitted he took £45million in kickbacks, lied to the bank about his corrupt deals, twice forged divorce documents so he could marry again.

Despite his history of deceit, Tim Leissner is the key witness in the trial of former Goldman colleague Roger Ng who is charged with helping loot Malaysia’s 1MDB sovereign wealth fund between 2009 2014.

Leissner pleaded guilty to conspiring to launder money violate an anti-bribery law in 2018 agreed to cooperate with prosecutors.

High life: Tim Leissner (pictured) is the key witness in the trial of former Goldman colleague Roger Ng who is charged with helping loot Malaysia’s 1MDB sovereign wealth fund

Ng, 49, pleaded not guilty to similar charges is standing trial in Brooklyn federal court in New York.

In more than a week of testimony, Leissner described his high-flying lifestyle as the lucrative 1MDB deals made him a ‘star’ the steps he took to avoid getting caught.

Leissner said he spent the kickbacks on an £11million 170 ft yacht, apartments in London New York, an investment in Italian football team current Serie A champions Inter Milan.

In 2013 he met Kimora Lee Simmons, an American model judge on America’s Next Top Model, ex-wife of music producer Russell Simmons.

They set a wedding date before Leissner finalised a divorce from another woman, so he forged divorce documents – the second time he had pulled such a stunt, he said.

Leissner, 52, said he hoped coming clean would ‘clear this chapter of my life’.

‘It’s not the proudest time of my life, but at the time I wanted to make more money, even though I was well-paid,’ Leissner testified.

The charges stem from some £5billion in bonds Goldman helped 1MDB sell in 2012 2013.

Prosecutors say nearly £3.5billion of that was embezzled by officials, bankers their associates, in one of the biggest scandals in Wall Street history.

In 2020, Goldman Sachs agreed to pay a £2.3billion fine.

Leissner said he Ng, Goldman’s top banker for Malaysia, secretly liaised with conspirators outside Goldman, received kickbacks.

Ng’s lawyer, Marc Agnifilo, argues that Leissner is falsely implicating Ng to lower his own sentence. Prosecutors say Leissner’s assertions are backed by other evidence.

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ALEX BRUMMER: The unforeseen fallout from Russia sanctions


ALEX BRUMMER: The unforeseen fallout from Russia sanctions becomes more threatening by the day

The bold decision by President Biden Boris Johnson to embargo Russian oil shows steely determination to make Moscow suffer.

The reality is that it is financial pressure on Russia which is most likely to undermine Vladimir Putin force change in the Kremlin.

At the start of the crisis it was assumed that Russia was well insulated by its £471billion of gold foreign exchange reserves.

Crude move: President Biden announced the US is to embargo Russian oil as it bids to pile more financial pressure on Russia following the invasion of Ukraine

What is unknown is how useful these reserves will be in keeping the Russian economy ticking over as access to other cash is blocked off by is exclusion from the Swift money transfer system closure of overseas branches of the country’s banks.

As a means of exchange, gold reserves are not practical if they cannot be turned into hard cash. It is likely that a proportion of the war chest is held in foreign assets, such as US Treasuries other government bonds, in bank deposits held overseas no longer accessible.

Surging oil gas prices are already dealing an economic shock to the global economy real incomes.

What is more obscure is the potential financial fallout from the Ukraine invasion whether there is a Northern Rock or Lehman out there, which could send a shock wave through the financial system.

Western banks are in a much better position to absorb unforeseen jolts than before the financial crisis of 2007-09.

With the help of shed loads of money printing, the banking system came through the pandemic relatively unscathed.

There is already some fallout from Russia. Italy’s UniCredit reports that it faces £5.9billion of loan losses in an ‘extreme scenario’. 

Overall it has £6.6billion exposed to Russian consumers, a further £3.8billion in cross border exposures as well as modest derivatives at risk.

France’s BNP Paribas has revealed £2.8billion of exposures to Moscow. What is not known is where the pieces will fall when the effect of sanctions against the oligarchs others come into view. 

Citigroup, ING JP Morgan are among lenders reviewing lending to telecoms firm Veon in which oligarch Mikhail Fridman has been involved.

The grounding of Airbus Boeing jets, which Russia has shielded from seizure, has put assets at risk.

The nearly 500 aircraft are estimated to have a value of £7.6billion there is concern as to whether they will ever be recovered.

None of this is decisive. But the accumulating list of knowns about the financial impact of sanctions becomes more threatening by the day.

China syndrome

The transition at the Pru from chief executive Mike Wells is proving less than smooth.

Normally when a highly regarded boss stands down, after a long period in charge, good governance dictates that a successor has been identified.

It is surprising that a board headed by someone as experienced as Baroness Vadera was so unprepared.

There is still no word on the next permanent chief executive, finance boss Mark FitzPatrick will hold the fort. The only firm commitment is that there will be a management tilt towards Hong Kong.

That looks unwise at present given that the territory is all but locked down by Covid. This doesn’t appear to trouble the Pru which says: ‘We have great faith an belief that Hong Kong will bounce back from this.’

Maybe, but whether Hong Kong can recover from the iron grip of Beijing the clampdown on freedoms, which has led more than 100,000 Hong Kong citizens with British National status to flee to London, is a moot point.

At least the Pru, with its rich British heritage, is not planning to move its listing. It needs people in London to deal with debt sales, reporting requirements service the needs of shareholders some 40 per cent of which are British-based.

That’s a relief, but does not guarantee that the next chief executive won’t cut run at the first opportunity.

Family affair

Any counter bid in the current turbulent market is remarkable.

So it is not surprising that the board of Stagecoach jumped at an offer from German asset manager DWS Infrastructure, at a cash offer at 54 per cent premium to the pre-bid price, for the bus company.

Fascinating that co-founder Ann Gloag is irrevocably tendering her shares to DWS while brother Brian Suter has committed to the National Express all-share merger deal.

Claymores at dawn.

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