A company linked to the Chinese Communist Party (CCP) is accused of providing fake gold as collateral to 14 financial institutions in China, and its reputation fell even further after the controversial handling of the CCP Virus pandemic.
The scandal affects Wuhan Kingold Jewelry, one of China’s largest manufacturers of gold jewelry, by delivering 91.49 tons of gold valued at about $3 billion, containing many golden copper bars, Fox News reported last week.
“This is not surprising; most of the counterfeits we see in our business come from China,” said Michael Wittmeyer, a gold expert with JMBullion.com, a precious metals trading company based in Dallas, Texas, in the United States.
“There are replica products of what we sell online, and while people pay good money, they are essentially worthless,” Wittmeyer added.
Kingold obtained loans from a dozen lenders and banks in China based on that alleged collateral to invest in China’s housing bubble.
The large company is listed on the NASDAQ stock exchange, so two law firms began investigating the case as alleged stock fraud.
It appears that the behavior of the financial industry regulated by the CCP has a behavior that is considered obscure, with the trust companies involved being part of the “shadow banks,” according to the Australian media Small Caps.
Kingold has apparently remained outside the investigations in China because of the possible influence-peddling by the majority shareholder, Jia Zhihong, described as “an intimidating ex-military man.”
Jia served in the army in Wuhan and Guangzhou, once managing gold mines for the People’s Liberation Army.
Kingold was also originally a gold factory in Wuhan, affiliated with the People’s Bank of China.
For some analysts, the case of the counterfeit gold scam filed with this company would be just “the tip of the iceberg.”
“And in the last five or ten years we’ve seen a lot of these kinds of headlines,” Wittmeyer added. “And we see, on a weekly basis, customers trying to sell (counterfeit) gold,” he also described.
Faced with the risk involved in dealing with companies linked to the CCP, U.S. law now requires these companies to adhere to the same accounting and auditing standards as U.S. companies from which they were previously exempt.
This would protect U.S. investors from possible irregularities by foreign, mostly Chinese, companies that do not meet this standard.
The CCP unleashed a large number of claims due to its controversial handling of the pandemic caused by the CCP Virus, which also originated in Wuhan, and which was shrouded in concealment and misinformation that prevented it from being combated in a timely manner.
Many countries and organizations are taking measures to protect themselves from the aggressive actions carried out by the increasingly discredited CCP, which puts international security at risk.