Caixin
Jul 15, 2020 06:45 PM
FINANCE

In Wake of Fake Gold Scandal, Kingold Defaults on Loans, Sheds Staff

What’s new: Scandal-ridden gold processor Kingold Jewelry Inc. disclosed that Wuhan Kingold Jewelry Co. Ltd., a contractually controlled affiliate of the Nasdaq-listed company, has defaulted on about 10 billion yuan ($1.4 billion) of loans borrowed from seven financial institutions, according to a company Nasdaq filing last week.

In another Tuesday filing, Kingold said Wuhan Kingold’s operation had been seriously disrupted by the Covid-19 epidemic and loan disputes. Its factory production headcount had decreased from hundreds to about 60 workers as of Tuesday.

What’s the background: Kingold is at the center of a fake gold scandal. Over the past five years, more than a dozen Chinese financial institutions, mainly trust companies, loaned 20 billion yuan to the company and Wuhan Kingold, which used gold as collateral, Caixin previously reported. But it turned out that at least some of the 83 tons of gold bars were nothing but gilded copper.

Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full Caixin article in Chinese, click here.

Related: Cover Story: The Mystery of $2 Billion of Loans Backed by Fake Gold

Contact reporter Guo Yingzhe (yingzheguo@caixin.com) and editor Marcus Ryder (marcusryder@caixin.com)

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