China's Kingold shares tank on report of fake gold bars

Kingold Jewelry

30/06/2020 13:06

BEIJING, June 30 (Reuters) - Kingold Jewelry Inc's  KGJI.O 
New York-listed shares fell as much as 40% on Monday following a
media report that alleged the Chinese company had obtained loans
by using fake gold bars as collateral.
    Kingold chairman Jia Zhihong was cited in the article as
denying there was anything wrong with the collateral and Kingold
did not immediately respond to a Reuters request for comment on
Tuesday. 
    Chinese business media outlet Caixin reported on June 27
that Kingold had secured 20 billion yuan ($2.83 billion) in
loans over the past five years using at least 83 tonnes of gold
bars, some of which turned out to be gilded copper.
    It said Kingold's top creditor, China Minsheng Trust Co.
Ltd., had gold bars it was holding as collateral tested and in
May the test results showed the bars contained copper alloy.
    With prices near eight-year highs  XAU= , 83 tonnes of gold
is worth around $4.5 billion.  
    Wuhan-based Kingold firm describes itself as a leading
producer of 24-karat gold jewellery in China.
    Its Nasdaq-listed shares on Monday fell as much as 40.2% to
$0.67, their lowest since listing in 2010, before closing down
23.8% at $0.85. 
    The stock traded as high as $15 in October 2017, Refinitiv
Eikon data show.
    The Shanghai Gold Exchange said on June 24 that Kingold's
membership had been cancelled due to violations of membership
provisions.  
    ($1 = 7.0765 Chinese yuan renminbi)

 (Reporting by Tom Daly; additional reporting by Cheng Leng in
Beijing and Peter Hobson in London; editing by Jason Neely)
 ((tom.daly@thomsonreuters.com; +86 10 5669 2119;))