Kingold Jewelry Sued for Allegedly Using Fake Gold for Loans

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Kingold Jewelry Sued for Allegedly Using Fake Gold for Loans

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Whoa, did they really think for one minute that they could get away with passing off 'gilded copper' as gold??! I find it hard to believe that anyone would try this, and yet their 'gold bars' are copper. :o

Kingold Jewelry Sued for Allegedly Using Fake Gold for Loans
July 2, 2020 by Rob Bates

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"Kingold Jewelry, a Chinese jewelry manufacturer that is listed on Nasdaq, is being sued for possible violations of securities laws after a local business publication accused the company of using fake gold bars to obtain bank loans.

Kingold, based in Wuhan province, sells 24-karat gold jewelry and Chinese ornaments primarily to Chinese retailers. The company premiered on Nasdaq with a reverse merger in 2010 and announced an initial public offering in 2011.

The suit, filed Tuesday in New York federal court by purported stockholder Rajani Chitturi, claimed that the company’s stock fell 24% to 85 cents a share, after Chinese media outlet Caixin alleged that it used “gilded copper,” disguised as gold, as collateral to obtain $2 billion in loans from banks.

The case, which seeks class-action status, charged Kingold executives with “misleading” authorities in its public statements that its loans were backed with gold.

According to the report in Caixin: “The fake gold came to light in February when Dongguan Trust Co. Ltd. set out to liquidate Kingold collateral to cover defaulted debts. Dongguan Trust said it discovered that the gleaming gold bars were actually gilded copper alloy.”

It added: “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.”

Other lenders now also suspect wrongdoing, and authorities are currently investigating, it said.

Caixin reported that chairman Jia Zhihong “flatly denies” using fake gold.

“How could it be fake if ... "

https://www.jckonline.com/editorial-art ... fake-gold/
PinkDiamond
ISG Registered Gemologist


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