General Nice subsidiary forced into liquidation

A company part of General Nice Group (俊安集团), the Chinese coal and iron trader that owns Isua iron mine in Greenland, has been ordered into liquidation by Hong Kong’s High Court, after a petition by Australian creditors. The company, General Nice Resources (Hong Kong) Ltd (俊安资源(香港)有限公司), is not directly connected to the Greenland project, but there is an indirect link: Isua is owned (through a Jersey company) by another Hong Kong entity, General Nice Development (Hong Kong), which has a 40% stake in the company that has just fallen into liquidation. Thus, while the Greenland mine’s ownership and management remains unaffected, a subsidiary of its owner has just been ordered to wind up.

The liquidation petition was launched by KordaMentha, an Australian insolvency firm appointed by General Nice as receiver of Pluton Resources, the owner of an iron mine on Cockatoo Island, WA. KordaMentha are said to be owed several million AUD for expenses incurred during their time at Pluton, where General Nice have a controlling stake. Pluton has seen a good amount of drama in the last couple of years, with disputes between General Nice, a Chinese partner, a Chinese client and Australian contractors, including multiple, at one time simultaneous, receiverships, a police intervention, and litigation in Hong Kong and Australia, up to the Supreme Court. To the extent what I’ve read about Pluton can be summarised in any meaningful way, General Nice claim they’ve been pumping funds into Pluton to keep it alive despite low iron prices, while everybody else claims General Nice owe them money.

Last year, another creditor, Baosteel subsidiary Ningbo Steel (宁波钢铁), had asked for General Nice Resources HK to be wound up. General Nice acknowledged the debt, but sued back, arguing Ningbo Steel were trying to hurt their reputation. Ningbo eventually dropped the liquidation petition and apparently got paid, but GN’s case against Ningbo went on for some time. In a nutshell, GN say Ningbo’s petition was defamatory and frivolous as they were going to pay anyway, while Ningbo say the petition was justified since they got paid thanks to it.

But there’s more. General Nice Group, including the Greenland licence-holder, is ultimately largely owned by its chairman, Cai Suixin 蔡穗新, and his family. (I wrote an overview of the Group some time ago.) Another recent Hong Kong court order targeted Cai directly. In late October, a High Court judge forbade Cai from removing assets from Hong Kong (or to keep at least US$20m within HK). The order was requested by a Mainland bank.

And still more. Besides that Mainland-related injunction against Cai, two more banks are trying to claim debts, according to Oriental Daily News. A month ago, Société Générale filed bankruptcy petitions against Cai Suixin and his sister Cai Suirong 蔡穗榕, who’s also involved in various companies in the Group. And in yet another case, last week HSBC petitioned the High Court attempting to recover mortgaged property in the Le Cachet (嘉逸轩) development in Happy Valley (跑马地) from Cai Suirong.

General Nice’s Arctic foray is not easy to interpret. The takeover of the Isua mine, which has no development perspectives in the medium term, and the (thwarted) attempt to buy a derelict naval base in Greenland (something I’ll be writing about soon), don’t seem to make much sense as commercial investments for a company that could use some profits. Perhaps the value of these Arctic moves is favour with state entities (including SOEs) related to them, rather than directly generated profits.

[Update, Dec 30: General Nice Group chairman Cai Suixin 蔡穗新 and high executive Lau Yu 柳宇 are resigning from their posts at the Group’s Hong Kong-listed company, “for personal reasons and hoping to devote more time to other business.” Their replacements come from Huarong 华融 Asset Management, a large state-owned company specialised in distressed assets, that is said to be in the process of restructuring some other General Nice assets.

The Hong Kong-listed company is not related to the Isua mine in Greenland. The company gone into liquidation discussed in this post is a shareholder in it. I explained the (rather colourful) history of the listed arm here.

A story by Walter Turnowsky about the General Nice Resources liquidation, referencing this post, appeared today in the online edition of Greenland paper Sermitsiaq.]

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Shenghe investment in uranium+rare-earth mine “implements vision reached during minister’s meeting with Greenlanders”

Shenghe 盛和 Resources’ investment in the Kvanefjeld project was made “in order to implement the vision” on mining cooperation “reached at the time of a meeting between minister of land and resources Jiang Daming 姜大明 and Greenland officials in 2015”, according to information published by the IMUMR, the state institution that controls Shenghe. The IMUMR is under Jiang’s ministry.

The acquisition, first announced in September and completed in the last few weeks, gives Shenghe one eigth of shares in Greenland Minerals and Energy (GME), the ASX-listed company running the Kvanefjeld project, as well as the right to appoint a non-executive director (Wenting Chen) to its board. This makes Shenghe the largest individual shareholder GME. Once the project receives an exploitation permit, Shengha could eventually increase its involvement to a 60% stake, a possibility whose presence in the September agreement GME took pains to deny and later confirm. GME’s initial unwillingness to acknowledge Shenghe’s stated intentions was perhaps due to a wish to avoid eliciting negative reactions in Denmark, where news about increasing Chinese presence in Greenland feed security worries.

The IMUMR’s explicit reference to the Kvanefjeld investment as part of a “vision” is another sign of the key role the Ministry of Land and Resources has in China’s moves in Greenland. GME’s talks with Shenghe did indeed start in 2015, possibly after those ministerial meetings. Until then, the Kvanefjeld project looked more likely to be developed with another state-owned company, China Nonferrous (中色), as envisaged by an earlier (non-binding) agreement.

와크-mole

Some time ago I brought up 와크 wakeu, a mysterious North Korean loanword, in the comments to a Language Log post by Victor Mair on NK attitudes to borrowings and regionalisms. Wakeu refers to a sort of trade license, often resold in the black market as a useful tool for obtaining foreign currency. A conversation with Jongseong Park ensued. Jongseong knows a lot about Korean transcriptions of foreign words and often writes about them. This post summarises what we said in that exchange.

Both of us vaguely recalled 와크 being based on a Russian initialism. At least in my case, the ultimate source for that assumption was likely a Dong’a Ilbo story that asserted 와크 came from Russian for ‘foreign trade committee’. To complicate matters further, as Jongseong noted, the story actually transcribed the alleged Russian form 바트 bateu, which looks like a typo (but you never know).

To end up as 와크 in Korean, a Russian initialism should have been something like (in Cyrillic) ВАК or maybe ОК. The final к for комитет ‘committee’ would make sense, but I couldn’t (and still can’t) come up with a plausible Soviet initialism. Jongseong initially suggested the Высшая аттестационная комиссия (Higher Attestation Commission), which is indeed known by its initials ВАК (transliterated VAK). The problem is that the VAK has little to do with trade. The VAK is an academic institution charged with overseeing dissertation committees. It’s functions include issuing and revoking the highest academic degrees (DSc (доктор наук) and PhD (кандидат наук)) and eventually overriding the decisions of thesis committees. The Soviet VAK was established by Stalin and survives in some post-Soviet states, including Russia, where suspicions exist about its role in the fake degree industry. The VAK is nowadays subordinate to the education ministry, but back in Stalin’s day it had a more powerful position and was used to refuse academic degrees to political or ethnic undesirables (here’s a first person account of how that worked). It’s unclear to me if North Korea has or ever had a similar institution (China, for example, doesn’t have an analogous centralised degree-issuing organ), and at any rate the connection to trade permits would be unclear. The etymology of 와크 is still a mystery.

Besides 와크, Korean-language sources often give another word for those trade licenses: 지표 jipyo. 와크 and 지표 might refer to two different types of license, to the organ issuing the permit and the permit itself, or just be roughly synonymous. Maybe 와크 is frowned upon as ‘foreign’ while 지표 is acceptable in official context as a pure (Sino-)Korean (yeah, I know). It’s not just me being confused; this authoritative-looking report (page 14 of the pdf) from the Korea Development Institute (한국개발연구원, KDI) isn’t sure about how to distinguish the two terms either. Whatever its precise semantics, 지표 is also something of an etymological puzzle. The most common word pronounced 지표 is probably the one spelt 指標 in hanja and meaning ‘index’, but its homonym 紙票 ‘paper slip’ looks like a better candidate for ‘permit’. Jongseong quotes the entry for this second 지표 from a 1992 North Korean dictionary, where one of the definitions is ‘banknote’, marked as obsolete.