Jinbi, one of the biggest names in Chinese copper trading, has been sentenced to life in prison over fraud and other offenses committed by the company he founded, Maike Metals International Co.

A court in the western Chinese city of Xi’an found Maike guilty of contract fraud, bribery and other offenses last month, and handed its 61-year-old boss, He, a life sentence, according to people familiar with the verdict. The ruling found Maike’s conduct had exposed several Chinese banks to more than $1 billion of potential losses, the people added, asking not to be named due to the sensitivity of the issue.

He — whose company was forced into restructuring in 2023 after a liquidity crisis stemming from Covid-era disruptions — has appealed the verdict. Members of the family, the defense team and He himself did not respond to Bloomberg telephone calls and voice messages. The judgment has not been made public.

While China does have online databases for most legal proceedings, political and other exceptions for sensitive cases can allow courts to hold back publication. He Jinbi’s defense argued during proceedings that neither the company nor its founder intended to commit fraud.

Maike worked with banks for more than a decade and regularly repaid its loans, striving to do so even when upheaval due to pandemic restrictions reduced cash flows. At least some losses at the lenders stemmed instead from inadequate internal risk controls and procedures, they said. A personable, charismatic figure, He was part of a group of enterprising traders who made fortunes during the rush for commodities in the early 2000s, as China began to urbanize and develop at a breakneck pace.

Maike, which he had founded with friends in Xi’an in 1993 with a 50,000 yuan loan (close to $8,700 at the time), shifted from mechanical and electrical products to focus on scrap metal, copper wire and refined copper. Maike built a position as a key link between international miners, traders and buyers.

At its peak, the group handled one in every four tons of copper imported into the world’s top consumer of the metal. The company placed bold bets, becoming a pioneer in the practice of borrowing against the massive volumes of metal He was shipping and storing in warehouses.

Maike was also at the forefront of a trend that saw many Chinese conglomerates expand into the booming real estate sector, investing in the hotels and business centers. In 2022 the company’s finances came under pressure as Covid restrictions upended business and a downturn in China’s property market hurt its investments.

A sharp fall in copper prices added to the strain. He acknowledged that year that Maike had sought help to address a liquidity crisis.

As Maike struggled to meet its obligations, creditors began taking action. In October 2023, Maike executives reported losing touch with He, and believed he had been detained by police. Maike filed for bankruptcy the following month.

Xiamen Xindeco Ltd., a state-owned company and one of Maike’s major creditors, won a bid to lead the restructuring of Maike and 25 affiliated companies, according to an exchange filing last December. Xindeco said it would invest 285 million yuan in cash. Under the plan, one of its units would take a 75% stake in a newly formed company consolidating Maike’s remaining trading and logistics assets, including facilities in Shanghai’s free-trade zone and offices in Shanghai, Xi’an and Shenzhen. A bankruptcy service trust in Shaanxi province will hold the remaining 25%, company said in December.