FAST FIVE: 83 Tons Of Fake Gold Bars: Gold Market Rocked By Massive China Counterfeiting Scandal

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And with authorities investigating how this happened, Kingold chief Jia flatly denies that anything is wrong with the collateral his company put up.

In the case of Kingold, the company said it took out loans against gold to supplement its cash holdings, support business operations and expand gold reserves, according to public records.

“How could it be fake if insurance companies agreed to cover it?” he said and refused to comment further.

But the loan issuance involved many irregularities as access to the pledged gold and testing procedures was controlled by Kingold, one Hengfeng employee said.

In 2019, Hengfeng's new management sued Kingold for the unpaid loans and moved to dispose the collateral.

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