Beijing’s buccaneer

Beijing’s buccaneer

Wei Jiafu – or Captain Wei as he is known in the industry – started as a radio officer at Cosco in the 1960s and climbed the ranks to take the helm as chairman in 1998.

Unlike the bosses of many state-owned firms, Wei is an outspoken figure. His personal story even includes an episode in which he claims to have been taken hostage by pirates in the Malacca Strait. Regularly ranked as one of the most influential people in world shipping, he was also a buccaneering leader in building up Cosco’s fleet, although his career ended in relative disaster when a gamble on charter rates led to losses of more than $5.5 billion between 2009 and 2013.

Cosco was then forced to sell assets in its bulk shipping division to avoid a humiliating delisting from the Shanghai stock exchange. Wei stepped down as chairman and after years of adoration, the press coverage was suddenly less flattering. Cosco’s management was later investigated for falsifying its earnings and some of its senior executives were detained for corruption.

Wei hasn’t been directly linked to the investigation and he has refuted criticism of Cosco’s financial performance, claiming that his mission was as much about “social responsibility” and “making a contribution to humankind” as earning a profit. “As long as Cosco is fully understood by the Party leaders and the State Council, it’s enough for me,” he has insisted.

Perhaps he has a point. The case against Wei is that he made terrible bets in buying ships and committing to long-term charters at a time when the Baltic Dry Index was close to record levels, leaving the company in a perilous financial position when the market turned for the worse. Critics say that Cosco’s risk management was rudimentary and the company was castigated for reneging on some of its charter contracts as the sector slumped. Yet there is also a sense that China’s strategic planners wanted control of a bigger portion of the world’s bulk carriers and that Cosco was encouraged to grow its fleet even as prices were peaking.

Captain Wei walked the plank when these decisions proved disastrous but he wasn’t the only man on deck when the worst of them were taken.

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