Posted on 06/29/2020 3:36:03 PM PDT by ameribbean expat
CAIXIN Mystery of $2bn of loans backed by fake gold in China Nasdaq-listed Kingold's play for trove of property stymied by corruption probe
The 83 tons of purportedly pure gold that Kingold creditors held in their coffers as of June would be equivalent to 22% of China’s annual gold production. © Reuters WU YUJIAN, WU HONGYURAN, BAI YUJIE and HAN WEI, Caixin June 29, 2020 15:27 JST
More than a dozen Chinese financial institutions, mainly trust companies, loaned 20 billion yuan ($2.8 billion) over the past five years to Wuhan Kingold Jewelry Inc. with pure gold as collateral and insurance policies to cover any losses.
Kingold is the largest privately owned gold processor in central China's Hubei province. Its shares are listed on the Nasdaq stock exchange in New York. The company is led by Chairman Jia Zhihong, an intimidating ex-military man who is the controlling shareholder.
What could go wrong?
Well, plenty, as at least some of 83 tons of gold bars used as collateral turned out to be nothing but gilded copper. That has left lenders holding the bag for the remaining 16 billion yuan of loans outstanding against the bogus bars. The loans were covered by 30 billion yuan of property insurance policies issued by state insurer PICC Property and Casualty Co. Ltd. (PICC P&C) and other smaller insurers.
The fake gold came to light in February when Dongguan Trust Co. Ltd. set out to liquidate Kingold collateral to cover defaulted debts. In late 2019 Kingold failed to repay investors in several trust products. Dongguan Trust said it discovered that the gleaming gold bars were actually gilded copper alloy.
(Excerpt) Read more at asia.nikkei.com ...
The CCP is usually somewhat harsh with white collar crooks. Is being "intimidating ex-miltary" enough to sidestep a bullet in the head?
The fake gold game. Reminds me of several decades ago I wanted to buy gold and found a place that would both sell it and keep possession of for you, that way it would be safe.
A current scam is internet TV streamers selling movies you will never take physical possession of as in a hard disc DVD. Apparently you can watch them only on their streaming service until they get bought out, go broke or change their mind.
Hard to believe this wasn’t found out earlier. Copper weighs less than half of what gold does.
If you don't take possession you need a trusted custodian.
If you have to take Chinese lessons you probably have a problem.
This Chinese Company Proudly Sells Tungsten-Filled Gold Bars
This is the better method. A replacement with copper, which is much lighter is easier to discover.
Not really..."quality control" is something of a luxury in China, the paradise of lying, cheating and fraud.
Some on the receiving end of the transaction were probably bought off.
They're also good at faking just about anything of value...Louis Vuitton, Gucci, heck...even Nike's.
China, the land of the fakes.
True.
“replace gold with tungsten”
Yup. Harder to detect, depending on how thick a coating of gold you use. Using copper is just cheap and greedy.
tungsten
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