Kingold Jewelry: Kingold or Fools Gold?

Pete Long profile picture
Pete Long

It does not bring me pleasure to expose frauds in China since I have invested too much of my personal time working in this space to simply leave it. But I've been sitting on this information for far too long, and no one has put this info out into the open yet.

In mid-May something fishy appeared on my Kingold Jewelry (OTC:KGJI) news feed, so I poked around the Chinese web until I found this webpage pictured below. This is a posting from the minority shareholder of KGJI's mainland subsidiary offering to sell its 4.1667% stake in the company (picture of the web posting - full posting shown in appendix )

The posting ran from May 1 to June 15 at CBEX, and was taken down after June 15. As well, here is a Chinese news report from mid-May, clearly stating that Kingold's subsidiary has posted its shares for sale on the Beijing Equity Exchange.

(Clarification of Translation: This minority shareholder is listed in SEC filings as Beijing Shouchuang Investment Co. Ltd, (北京首创创业投资有限公司). According to Beijing Shouchuang's website, they use the English name "Beijing Capital Investment Co., Ltd." They are held by the Beijing Capital Group, ((北京首都创业集团有限公司) a state owned company with 68 billion in assets under management. This posting is listed by the Beijing Capital Group, which is whom will be referred to from hereon. Beijing Capital Group website can be found here. And here are Chinese articles from 2008 citing Beijing Shouchuang's investment in KGJI's mainland operating subsidiary here & here.

So I Dug Deeper

First Red Flag: The shares are being offered at a much lower price than the NASDAQ shares.

The selling price was much less than what the stock of the parent company was trading for on the Nasdaq. On May 18, Beijing Capital listed their 5M

This article was written by

Pete Long profile picture
Shanghai based investor.

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