By SCOTT PATTERSON
Liu Zhongtian, chairman of aluminum giant China Zhongwang Holdings Ltd., in his office in 2009.
A giant stockpile of aluminum that has crisscrossed the globe remains a puzzle for American executives and investigators trying to unravel the logic behind its movements.
A Dallas attorney’s correspondence suggests a surprising possibility: that the stash is a Chinese billionaire’s retirement fund.
Like all Chinese citizens, Liu Zhongtian, the 52-year-old chairman of aluminum behemoth China Zhongwang Holdings Ltd., isn’t supposed to move more than $50,000 a year out of the Communist Party-led country.
To get around the restrictions, Chinese nationals have used Hong Kong money changers to illicitly transfer cash between bank accounts, combined their $50,000 quotas to make large-scale transfers and even carried cash across borders in suitcases.
Mr. Liu developed an industrial-scale approach involving boatloads of aluminum which he stockpiled with plans to sell the metal over time, according to the Dallas attorney’s correspondence and people who have worked for Mr. Liu whose accounts are supported by shipping and corporate records.
Mr. Liu sought to establish companies that could control his wealth outside China and set up an office in Switzerland, according to a 2012 email from attorney Herman Randow of Dallas firm Munsch Hardt Kopf & Harr.
An aerial view of the aluminum stockpile around Aluminicaste Fundición de México’s San José Iturbide plant in 2014.
“We are at the early stages of this family office,” Mr. Randow wrote in the email reviewed by The Wall Street Journal.
American executives have accused Mr. Liu of routing inexpensive, government-subsidized aluminum into the U.S. through Mexico and Vietnam to avoid U.S. tariffs.
Mr. Liu developed an industrial-scale approach involving boatloads of aluminum which he stockpiled with plans to sell the metal over time, according to the Dallas attorney’s correspondence and people who have worked for Mr. Liu whose accounts are supported by shipping and corporate records.
Mr. Liu sought to establish companies that could control his wealth outside China and set up an office in Switzerland, according to a 2012 email from attorney Herman Randow of Dallas firm Munsch Hardt Kopf & Harr.
An aerial view of the aluminum stockpile around Aluminicaste Fundición de México’s San José Iturbide plant in 2014.
“We are at the early stages of this family office,” Mr. Randow wrote in the email reviewed by The Wall Street Journal.
“It will not be robust until Mr. Liu retires and leaves China to live in Switzerland. That is his ultimate goal.”
A China Zhongwang spokeswoman wrote in an email that Mr. Liu “does not know this law firm, and has never had any business dealing with it.”
A China Zhongwang spokeswoman wrote in an email that Mr. Liu “does not know this law firm, and has never had any business dealing with it.”
She added: “We have no knowledge of the correspondence to which you refer and question its authenticity.”
A spokeswoman for Munsch Hardt Kopf & Harr said the firm doesn’t currently represent Mr. Liu “nor have we represented Mr. Liu or his interests for quite some time.”
A spokeswoman for Munsch Hardt Kopf & Harr said the firm doesn’t currently represent Mr. Liu “nor have we represented Mr. Liu or his interests for quite some time.”
She said Texas ethics laws prevented her from commenting further.
Mr. Randow, who still works for the firm, didn’t respond to requests for comment.
The law firm email is a tantalizing clue that could help explain why several large aluminum stockpiles have mysteriously popped up around the world.
The law firm email is a tantalizing clue that could help explain why several large aluminum stockpiles have mysteriously popped up around the world.
Metal caches in Mexico and Vietnam have been the subjects of Wall Street Journal articles that have traced the metals’ connections to Mr. Liu and businesses tied to him and his family.
Mr. Liu has denied any connection to the aluminum or to the companies moving it around the world. “As we have repeatedly stated, neither China Zhongwang nor Mr. Liu has connections to the ‘stockpile’ in Mexico, or the metal in Vietnam,” his company’s spokeswoman wrote.
Most of the Mexican aluminum stockpile was moved to Vietnam, according to trade records and people familiar with the matter.
Mr. Liu has denied any connection to the aluminum or to the companies moving it around the world. “As we have repeatedly stated, neither China Zhongwang nor Mr. Liu has connections to the ‘stockpile’ in Mexico, or the metal in Vietnam,” his company’s spokeswoman wrote.
Most of the Mexican aluminum stockpile was moved to Vietnam, according to trade records and people familiar with the matter.
All told, about 1.7 million tons of aluminum has been stored in Vietnam since 2015 by a company co-owned by one of Mr. Liu’s business associates, according to trade and corporate records and people familiar with Mr. Liu’s business operations.
Data provided by Global Trade Information Services, which tracks world-wide trade, values the aluminum at about $5 billion.
The metal has been extruded, or turned into various shapes, for sale as products.
The stockpiles are so big that metals-industry officials have been worried they are depressing global aluminum-extrusion prices.
The stockpiles are so big that metals-industry officials have been worried they are depressing global aluminum-extrusion prices.
The market for aluminum, like other commodities such as steel, has been plagued by a glut driven by supercharged Chinese production.
A plant owned by China Zhongwang Holdings in Liaoyang, China.
A plant owned by China Zhongwang Holdings in Liaoyang, China.
American executives have accused Mr. Liu of routing inexpensive, government-subsidized aluminum into the U.S. through Mexico and Vietnam to avoid U.S. tariffs.
China Zhongwang’s products have faced tariffs as high as 374% because a 2010 Commerce Department probe found the company received illegal Chinese subsidies and was “dumping”—selling aluminum products below market prices.
The Department of Homeland Security is investigating whether U.S. companies linked to Mr. Liu illegally avoided punitive import tariffs on Chinese aluminum, according to people familiar with the probe.
The Department of Homeland Security is investigating whether U.S. companies linked to Mr. Liu illegally avoided punitive import tariffs on Chinese aluminum, according to people familiar with the probe.
In a separate investigation, the Commerce Department ruled this year that China Zhongwang had sidestepped U.S. trade sanctions by disguising its metal in a form not specifically covered by the 2010 trade restrictions.
China Zhongwang said it was no longer selling the type of aluminum targeted by Commerce.
The Dallas attorney’s email raises another possibility for the metal: Aluminum, which is commonly traded in dollars, provided a way of moving currency out of China.
In his email, the Dallas attorney, Mr. Randow, emphasized the secret nature of Mr. Liu’s plans to set up businesses outside of China and live in Switzerland.
“I want to reinforce that all this information and these relationships absolutely are confidential, and I am not typically authorized to freely disseminate this information to third parties outside of the family office,” Mr. Randow wrote.
Mr. Randow’s email was related to two Swiss companies that he said were owned by Mr. Liu: Eighty Eight Investments AG and Grand Provenance Holdings AG.
Grand Provenance is the parent of GT88 Capital, a Singapore aluminum-trading firm that shipped more than $1 billion worth of aluminum from 2010 to 2013 to a Mexican facility once owned by Mr. Liu’s son called Aluminicaste Fundición de México, according to shipping and corporate records. The GT88 shipments formed part of the Mexican stockpile under investigation by the Commerce Department, people familiar with the matter say.
Liu Zhongtian toasts the listing of the shares of China Zhongwang Holding at the Hong Kong Stock Exchange in 2009.
Mr. Randow wrote that Grand Provenance and Eighty Eight “are simply the confidential holding companies for the family office for Mr. Liu Zhongtian.”
The companies “simply direct all his investments out of the People’s Republic of China,” Mr. Randow wrote.
The email was sent to a business associate of Mr. Liu’s in response to questions from Banque Heritage, a Swiss bank conducting due diligence on the companies as they tried to open an account.
If the bank had more questions about Mr. Liu, Mr. Randow suggested: “Google him.”
Banque Heritage declined to comment.
Mr. Liu, through a spokeswoman, denied any involvement with Grand Provenance and Eighty Eight. Mr. Liu’s main company, Liaoyang-based China Zhongwang, says it sells most of its aluminum to Chinese companies.
A U.S. attorney who has represented Mr. Liu, Charles Pok, says Mr. Liu’s name was fraudulently connected to the two Swiss companies by a former U.S. business associate named Eric Shen.
China Zhongwang said it was no longer selling the type of aluminum targeted by Commerce.
The Dallas attorney’s email raises another possibility for the metal: Aluminum, which is commonly traded in dollars, provided a way of moving currency out of China.
In his email, the Dallas attorney, Mr. Randow, emphasized the secret nature of Mr. Liu’s plans to set up businesses outside of China and live in Switzerland.
“I want to reinforce that all this information and these relationships absolutely are confidential, and I am not typically authorized to freely disseminate this information to third parties outside of the family office,” Mr. Randow wrote.
Mr. Randow’s email was related to two Swiss companies that he said were owned by Mr. Liu: Eighty Eight Investments AG and Grand Provenance Holdings AG.
Grand Provenance is the parent of GT88 Capital, a Singapore aluminum-trading firm that shipped more than $1 billion worth of aluminum from 2010 to 2013 to a Mexican facility once owned by Mr. Liu’s son called Aluminicaste Fundición de México, according to shipping and corporate records. The GT88 shipments formed part of the Mexican stockpile under investigation by the Commerce Department, people familiar with the matter say.
Liu Zhongtian toasts the listing of the shares of China Zhongwang Holding at the Hong Kong Stock Exchange in 2009.
Mr. Randow wrote that Grand Provenance and Eighty Eight “are simply the confidential holding companies for the family office for Mr. Liu Zhongtian.”
The companies “simply direct all his investments out of the People’s Republic of China,” Mr. Randow wrote.
The email was sent to a business associate of Mr. Liu’s in response to questions from Banque Heritage, a Swiss bank conducting due diligence on the companies as they tried to open an account.
If the bank had more questions about Mr. Liu, Mr. Randow suggested: “Google him.”
Banque Heritage declined to comment.
Mr. Liu, through a spokeswoman, denied any involvement with Grand Provenance and Eighty Eight. Mr. Liu’s main company, Liaoyang-based China Zhongwang, says it sells most of its aluminum to Chinese companies.
A U.S. attorney who has represented Mr. Liu, Charles Pok, says Mr. Liu’s name was fraudulently connected to the two Swiss companies by a former U.S. business associate named Eric Shen.
“Eric Shen and Herman Randow definitely know that Mr. Liu never instructed them to establish these companies,” Mr. Pok wrote in an email.
Munsch Hardt said the firm and Mr. Randow denied Mr. Pok’s allegations.
Munsch Hardt said the firm and Mr. Randow denied Mr. Pok’s allegations.
Mr. Shen also denied them.
American executives who have investigated the shifting stockpiles of metal say they suspected Mr. Liu may have been motivated in part by a desire to move wealth offshore.
American executives who have investigated the shifting stockpiles of metal say they suspected Mr. Liu may have been motivated in part by a desire to move wealth offshore.
Even though he ultimately failed to sell large amounts of metal into the U.S., they point out that it still serves as a store of value.
Mike Rapport, who owns an aluminum business in Southern California, said an Aluminicaste salesman told him Mr. Liu planned to use the Mexican metal to fund his retirement.
Mr. Liu has made moves that indicate he may be preparing to leave China.
Last year, he paid €650,000 to become a Maltese citizen, taking advantage of a new policy introduced by Malta’s government in 2014, according to government records there.
Mike Rapport, who owns an aluminum business in Southern California, said an Aluminicaste salesman told him Mr. Liu planned to use the Mexican metal to fund his retirement.
Mr. Liu has made moves that indicate he may be preparing to leave China.
Last year, he paid €650,000 to become a Maltese citizen, taking advantage of a new policy introduced by Malta’s government in 2014, according to government records there.
With Maltese citizenship, Mr. Liu can live and work in any country in the European Union.
Chinese law forbids the country’s citizens from holding dual citizenship.
Mr. Liu also has a Social Security number in the U.S., where his family owns several homes, according to a records search.
The China Zhongwang spokeswoman said the company doesn’t comment on personal matters.
In August, Zhongwang USA LLC, controlled by Mr. Liu and affiliated with China Zhongwang, agreed to acquire Cleveland-based aluminum producer Aleris Corp. for $1.1 billion, which would mark the highest price ever paid by a Chinese firm for a U.S. metals producer.
Mr. Liu also has a Social Security number in the U.S., where his family owns several homes, according to a records search.
The China Zhongwang spokeswoman said the company doesn’t comment on personal matters.
In August, Zhongwang USA LLC, controlled by Mr. Liu and affiliated with China Zhongwang, agreed to acquire Cleveland-based aluminum producer Aleris Corp. for $1.1 billion, which would mark the highest price ever paid by a Chinese firm for a U.S. metals producer.
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