Ji Fenghua, president of bankrupt shipyard Mingde Heavy Industry, was taken away by the Nantong local police authorities to assist investigations on July 23 and has yet to return to the company, local media has reported.
Right now all operations of Mingde Heavy Industry have been suspended and all orders at the yard are set to be cancelled with the exception of one lake bulk carrier, which will start a sea trial on August 5. The owner of the vessel is believed to be Canadian company Algoma Central Corporation.
In March, Jiangsu Superior People’s Court ruled to freeze RMB700m ($112m) in assets belonging to Ji Fenghua and Cheng Jianhua, a shareholder of Mingde Heavy Industry, at the request of the yard’s largest creditor Sainty Marine over a debt dispute.
Mingde Heavy Industry has commenced the severance process for about 2000 employees, while Nantong local government has had to use a police presence at the shipyard to maintain order.
Sainty Marine said it might face up to RMB2.94bn ($473m) in losses if the restructuring of Mingde Heavy Industry fails.