All that is about to change with the discovery of what may be one of the biggest gold counterfeiting scandal in recent history. And yes, not only does it involve China, but it emerges from a city that has become synonymous for all that is scandalous about China: Wuhan itself.
FROM ZERO HEDGE:
Some more background: Kingold - whose name was probably stolen from Kinross Gold, one of the world’s largest gold miners - 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 (although its current market cap of just $10MM is a far cry from its all time highs hit when the company IPOed on the Nasdaq around 2010) . The company is led by Chairman Jia Zhihong, an intimidating ex-military man who is the controlling shareholder.
What could go wrong?
Well, apparently everything as at least some of 83 tons of gold bars used as loan 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. And as Caixin adds, the loans were covered by 30 billion yuan of property insurance policies issued by state insurer PICC Property and Casualty and various other smaller insurers.
The fake gold came to light in February when Dongguan Trust (one of those infamous Chinese shadow banks) set out to liquidate Kingold collateral to cover defaulted debts. As the report continues, in late 2019 Kingold failed to repay investors in several trust products. To its shock, Dongguan Trust said it discovered that the gleaming gold bars were actually gilded copper alloy.
Copper? Not even tungsten? Gold is more that twice as dense as copper so detection would require the advanced scientific tool of picking it up in your hand.
Communism and complete top-down political central planning encourages cronyism and fakery in everything.
China is the world leader in fakery.
I suspect Jia will be shot.
Who knew the Chinese cheat?
I don't think they're stupid . . . but maybe Communism makes you crazy.
Wuhan. Why does that sound familiar?
Oopsie. I'm sure there's a reasonable explanation for all this. Getting bamboozled by lying crooks, that's actually one pretty reasonable explanation...
It sounds like the guys at Kingold got both the money from the loans AND the real gold they used as collateral. Better than the sting in “The Sting”.
Nice work there, guys!
I’ll reserve laughter until there is an audit of Fort Knox bullion.
How about $16 Trillion in loans backed by nothing?
Fake gold and ghost cities in China and fake home and car loans in the USA.
I’ve got some big copper nuggets from the deposits in Michigan’s U.P. I’m RICH!