Wuhan Kingold Jewelry Inc

Discussion in 'Stocks & Derivatives' started by jultorsk, Jun 29, 2020.

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  1. jultorsk

    jultorsk Well-Known Member Silver Stacker

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    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.

    The news sent shock waves through Kingold's creditors. China Minsheng Trust Co. Ltd., one of Kingold's largest creditors, obtained a court order to test collateral before Kingold's debts came due. On May 22, the test result returned saying the bars sealed in Minsheng Trust's coffers are also copper alloy.

    Authorities are investigating how this happened. Kingold chief Jia flatly denies that anything is wrong with the collateral his company put up.

    The case holds echoes of China's largest gold-loan fraud case, unfolding since 2016 in the northwest Shaanxi province and neighboring Hunan. Regulators found adulterated gold bars in 19 lenders' coffers backing 19 billion yuan of loans. In one case, a lender seeking to melt gold collateral found black tungsten plate in the middle of the bars.

    In the case of Kingold, the company said it took out loans against gold to supplement its cash holdings, support business operations and expand gold reserves, according to public records.
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    Story continues -> https://asia.nikkei.com/Spotlight/Caixin/Mystery-of-2bn-of-loans-backed-by-fake-gold-in-China
     
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  2. JulieW

    JulieW Well-Known Member Silver Stacker

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    " Kin Gold "

    :D
     
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  3. leo25

    leo25 Well-Known Member Silver Stacker

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    Fake gold in China, i never thought ill see the day...:rolleyes:
     
  4. mongrelmaple

    mongrelmaple Well-Known Member Silver Stacker

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    In other news, water is wet! :D Can’t believe people are so stupid as to trust the Chinese with ANYTHING
     
  5. Oddjob

    Oddjob Well-Known Member Silver Stacker

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    ^^^^^
    Yep, nothing in that article (or the Zero Hedge posted by Shaddam IV in the other thread) surprises me.

    To those PRC entities burnt by this.... upload_2020-6-30_22-23-26.jpeg
     
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  6. hardyakkagold

    hardyakkagold Active Member

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    I purchased a Chinese Panda gold coin set from the now defunct Mossgreen Auctions of Armadale some years ago.

    I put it in a safe and left it there for two or three years, thinking that they must have tested it to make sure it wasn't fake.

    Finally decided to get it tested with old mates XRF scanner and you guessed it, was as fake as a $3 bill or a $3 coin nowadays.

    It was my first and last foray into Chinese numismatics, lesson learned for this stacker.

    Had a bit of bother trying to get a refund from the firm on account of the time lapse since purchase.

    Finally had to send a email to their CEO Paul Sumner threatening to inform the police fraud squad of the matter.

    That speeded the refund process considerably, and I got my money back in a couple of days.
     

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