DISCOVERIES 83 TONS OF FALSE GOLD. Perhaps the largest quantity ever found pollutes the world of collaterals

The news of the presence of tugsten or copper ingots covered with gold and passed off as ingots of the precious metal are not new, but now from the East we have the news of an unprecedented counterfeiting that could have serious consequences.

The protagonist is China , or rather the same city of Wuhan which was the heart of Covid-19. The protagonist is Wuhan Kingold Jewelery Inc, a company that called itself "With a golden future", but perhaps it would have been more correct to call it "Coppery". Why this company borrowed from several Chinese informal trusts and financial institutions, the famous Chinese "Shadow banking", 20 billion Yuan, 2.8 billion dollars, in exchange for a pledge consisting of gold for a total of 83 tons . All perfect for a company that has as its goal the refining and processing of gold, too bad that there was no gold. very. In May, the creditor Dogguang Trust, one of the famous operators of Shadow Banking, carried out tests to discover that the ingots entrusted as collateral were not gold, but simply plated copper. Then a similar test was carried out on the gold deposited in the Minsheng trust, also revealing them that it was plated noble metal. Now the difference in specific gravity between gold and copper is such that even a simple ingot weight with volume comparison could have discovered the trick. Connivance or superficiality.

This is a list of loans:

The scandal risks creating an incredible domino effect in the Chinese financial sector because many of these loans, as you can see, were guaranteed by insurances provided by the primary PICC P&C company which now refuses to repay the loans. Now the scandal is widening, with Kingold defaulting on two bonds worth several billion yuan and Kingold being kicked out of the Shanghai Gold Exchange.

You can understand that if a loan guaranteed in gold and secured by a leading company in the sector is not a safe loan, there is little left to invest in without thinking that the money can disappear. This fraud has been discovered, but how many other collaterals will there be in China? This is the decisive question.

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This is a machine translation of a post published on Scenari Economici at the URL on Tue, 30 Jun 2020 05:45:01 +0000.