Kingold Jewelry secures US$2.8 billion in loans with gilded copper bars, in latest fraud that embarrasses China, irks US
- Nasdaq-listed Kingold, one of China’s largest jewellery makers, allegedly used 83 tonnes of gold bars as loan collateral, which later turned out to be gilded copper, according to a report by the Caixin news outlet
- It follows Luckin Coffee’s recent fraud case and is sure to fuel a recent drive by US politicians to expel Chinese companies from Wall Street
Kingold Jewelry, a Nasdaq-listed jeweller and producer of household ornaments, has been accused of large-scale fraud in the second major scandal in three months involving a Chinese company listed in the US.
The Wuhan-based company is alleged to have used fake gold bars as collateral to fraudulently obtain 20 billion yuan (US$2.8 billion) in loans, in a case that risks fuelling a recent drive by American politicians to expel Chinese companies from Wall Street.
Shares of the Nasdaq-listed gold processor plunged by almost a quarter after the allegations emerged on Monday morning on the website of Caixin, a mainland Chinese financial news outlet.
Kingold strongly denies any wrongdoing and is being investigated by the “authorities”, according to Caixin. The company could not be reached for comment by the Post.
Kingold, one of China’s largest gold jewellery manufacturers, allegedly used 83 tonnes of gold bars as loan collateral, which later turned out to be gilded copper. Caixin described it as one of the largest gold loan fraud cases China has ever seen.
The loans were obtained over the past five years from at least 14 Chinese financial institutions, Caixin’s report said.