Source | Haixi Business Circle (haixishangjie)
Author | How did A Dolphin
83.3 tons of fake gold deceive more than a dozen trust companies , third-party insurance companies, and banks, and successfully obtain tens of billions of funds? ?
It has been nearly 20 months since the "fake gold case" occurred, and the legal trial of this most explosive incident in the asset management circle is still in full swing.
As the rights protection appeals and enforcement cases of various trust institutions proceed one after another, the court has successively frozen the equity of various companies held by Jia Zhihong, the actual controller of Jinhuang Jewelry, involving a total amount of 11.2 million yuan.
After combing through the Haixi business community, we found that the development history of Jinhuang Jewelry and the family history of the company’s chairman, Jia Zhihong, are both shrouded in mystery.
Why did this company, which used to be one of the largest gold jewelry manufacturers in China, go to "destruction"?
The first domestic gold company listed on the U.S. stock market
After combing through the Haixi business community, it was found that the development process of Jinhuang Jewelry and the family history of the company's chairman Jia Zhihong are both shrouded in mystery.
There is extremely little information about Jia Zhihong himself on the Internet, and we can only get a glimpse of it from the company's prospectus and media reports.
Information shows that Jia Zhihong was born in 1961 and has worked in different regional military region logistics departments, military research institutes and other places.
In 2002, Jia Zhihong acquired the Hubei Gold Factory, which was affiliated with the central bank, and immediately established Wuhan Jinhuang Jewelry Company with a registered capital of 120 million yuan. Jia Zhihong is the chairman and actual controller of the company.
In 2003, Jia Zhihong and founding shareholder Xue Suyue once again spent 95.1056 million yuan to acquire Xiamen Ximei Jewelry Co., Ltd.'s special jewelry manufacturing equipment for capital increase, of which Jia Zhihong invested more than 87 million yuan.
is not a rich second generation and has never started a business before. Where did Jia Zhihong’s start-up capital and the huge funds for purchasing equipment come from?
According to reports, China was in the midst of a gold bull market at that time. Some people in the financial industry said that Jia Zhihong seemed to be very accurate about the price of gold, and gained a lot of wealth through speculation in gold . Jinhuang Jewelry also explained it as income from stock trading.
However, it is still unclear how Jia Zhihong, who has never had a market background, became a genius in "stock trading". However, after transitioning from a stock speculator to the gold industry, Jia Zhihong still showed an unusual enthusiasm for the capital market.
In 2007, Jia Zhihong single-handedly facilitated the restructuring of Jinhuang Jewelry into shares. The following year, due to the rise in gold prices and the outstanding profit performance of Golden Phoenix Jewelry, Jia Zhihong led Golden Phoenix Jewelry to attack A shares . Although
's revenue just met the standards for entering the market, Golden Phoenix Jewelry failed to go public due to its operating conditions, financial loopholes, and unknown sources of funds.
In desperation, Jia Zhihong turned his attention to US stocks. In August 2010, Jinhuang Jewelry was listed on the US stock market, becoming the first Chinese gold jewelry company to be listed in the US. After a series of operations, the share price of Jinhuang Jewelry soared to US$71 per share within a week. The peak of
was followed by decline. Most of the capital in and out of the U.S. stock market is controlled by consortiums and funds. Golden Phoenix Jewelry has no advantage in this. The stock price has continued to fall, and the market value has evaporated by more than 99%, from the highest of US$71 to less than US$0.5 per dollar in 2015. share. As a result, Jia Zhihong came up with the idea of A-shares again.
In 2016, Jia Zhihong controlled the brand ST Changyu through related personnel and related enterprises, and wanted to achieve the listing of Jinhuang Jewelry by backdooring ST Changyu. Although Jia Zhihong never came forward, he still attracted the attention of the China Securities Regulatory Commission, which made his plan fail.
In 2018, Jia Zhihong once again planned to backdoor A-shares. This time he targeted Sanhuan Group , a large manufacturing company in Hubei. However, its A-share dream was shattered again. The persistence of attacking A-shares also paved the way for the subsequent thunderstorms of Jinhuang Jewelry.
Fake gold defrauded tens of billions, and the company applied for to be delisted.
In order to obtain the equity of Sanhuan Group and realize the backdoor transaction of its listed company " Xiangyang Bearing ", Jia Zhihong wanted to invest 6.998 billion yuan in it. At this time, Jinhuang Jewelry, whose stock price continued to plummet, could no longer afford the money.
But this is not a problem for Jia Zhihong. He ran around, using gold as collateral, and found 15 trust companies and some banks including Chang'an Trust , Dongguan Trust , Minsheng Trust, Sichuan Trust , and invited the People's Insurance Company of China as a guarantee to "mortgage the gold." + Insurance Guarantee” model successfully raised tens of billions of dollars, acquired the equity of Sanhuan Group, and participated in its mixed-ownership reform process.
However, before the dream of going public with the help of Sanhuan Group was realized, the scam manipulated by Jia Zhihong came to light, shocking the financial world.
In February 2020, due to the overdue date of the Jinhuang Jewelry Trust Plan, Dongguan Trust applied to the court to liquidate its gold collateral. During a random inspection of gold bars, it was revealed that the gold bars were gold-plated copper and not pure gold, which shocked the market.
In May of the same year, a 600 million trust plan of Minsheng Trust expired, and they also requested third-party testing of the gold pledged by Jinhuang, but Jia Zhihong refused. Such behavior intensified Minsheng Trust's suspicion. The final test results showed that its gold was fake. From then on, Jia Zhihong's scam began to explode on a large scale. At the same time, Jia Zhihong suddenly disappeared and was nowhere to be found.
According to the investigation, the amount involved in the trust explosion was about 16 billion yuan, corresponding to 83.03 tons of gold. What is the concept of 83 tons? Nearly half of China’s total gold supply in 2019.
In addition, among the 15 trust institutions that were hit by the scandal, Minsheng Trust ranked first with a loan amount of over 4 billion, becoming the biggest victim. This also dealt a heavy blow to Minsheng Trust and the "Oceanwide System" behind it. Minsheng suffered a huge loss of 390 million yuan that year, and other trust institutions were not immune to the problem. They are even accused of having risk control loopholes today.
However, the most "miraculous" thing about this matter is that when financing, Jia Zhihong did not choose the most convenient "standardized" pledge process. Instead, when pledging, he gathered personnel from Jinhuang Jewelry, Trust and Bank, and Insurance Company for on-site inspection. , and videotape the entire process. After obtaining the inspection results, the pledged items will be escorted to the bank safe.
Why did Jia Zhihong choose such a cumbersome process? How can gold be turned into fakes under the supervision of three parties? It still cannot be explained.
In fact, Jia Zhihong has 41 companies under his name and is involved in many industries in Wuhan. Some people in the industry said that Jia Zhihong had a bad reputation in Wuhan circles and it was not the first time that he had used fake gold to raise funds. None of the institutions that invested in Jia Zhihong this time were from Wuhan. Some people in the financial industry commented on him: He takes both black and white.
On June 24, 2020, Jinhuang Jewelry, which was exposed to scandal, was delisted from the Shanghai Gold Exchange. Subsequently, Jinhuang Jewelry’s online store and official website were also closed.
Amid the turmoil, Golden Phoenix Jewelry had to announce that it would apply for delisting from Nasdaq on its own. As of now, Jinhuang Jewelry is still in the 18-month adjustment period of the US stock market, but its stock price has recently fallen to US$0.0001 per share, with a market value of only 1,102 yuan. According to this situation, delisting is a foregone conclusion.
In September 2020, Jia Zhihong was taken away by the police for investigation. In the same month, Jia Zhihong was restricted from high consumption by the court. The following month, Wuhan Jinhuang Jewelry was enforced by the court and faced a class action lawsuit from small and medium shareholders. As of today, Golden Phoenix Jewelry has been involved in 69 judicial cases.
The Jinhuang Jewelry fake gold case involves a wide range of aspects. Although the restructuring of the Hubei Third Ring Road is a foregone conclusion, due to the impact of this case, the assets have been frozen and it is extremely difficult to revitalize them. In addition, Huang Xiaowen, chairman and general manager of Dongguan Trust, was also revealed to be under supervisory investigation in 2021. The impact of the
case is still continuing, and the asset management circle should also take this as a warning to strengthen strict control over pledge financing of non-standardized assets such as artworks, antiques, and gold jewelry to improve risk resistance. As for companies that want to take shortcuts and get rich through illegal activities, the sword of Damocles hanging over their heads will eventually fall.
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