China in counterfeit gold scandal as Wuhan company uses fake bars to gain $4.1bn in loans
Comment of the Day

July 02 2020

Commentary by Eoin Treacy

China in counterfeit gold scandal as Wuhan company uses fake bars to gain $4.1bn in loans

This article from smallcaps.au may be of interest to subscribers. Here is a section:

The story broke after a Beijing-based website investigated complaints and then posted the news under the headline: “The mystery of [US]$2 billion of loans backed by fake gold”.

Kingold is denying it lodged fake bars with Chinese lenders such as China Minsheng Trust, Hengfeng Bank, Dongguan Trust and Bank of Zhangjiakou. The trust companies involved are largely what are known as “shadow banks”.

The alleged scam came to light earlier this year when Kingold defaulted on loans to Dongguan Trust. The gold bars pledged as collateral turned out to be gilded copper alloy. Minsheng Trust’s “gold” bars have also turned out to be copper alloy under the gilded surface.

 

Eoin Treacy's view

Veteran gold watchers will remember the case of gold-plated tungsten bars which began to turn up in New York a few years ago. 82 tonnes of gold is a substantial total and highlights the lack of governance in China’s financial system.

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