How Kingold Jewelry's fake gold bars slipped through scrutiny in one of China's biggest loan scams

Is gold commonly used as collateral for loans in China? Some banks do accept gold bars or bullion as collateral, because bars are tradeable on the Shanghai Gold Exchange, where Kingold is a member Assaying, typically conducted by a government-certified office, is a way to ensure that the bullion or bars produced by a gold mint meet the purity standards and content Kingold's "Gold bars" were examined by its lenders, as well as state-controlled PICC Property & Casualty, which insured 30 billion yuan worth of the jeweller's loans, according to the Caixin report.

What are the loan procedures in Hong Kong?Borrowers are required by lenders to provide "Fresh" or "Virgin" gold directly sourced from accredited producers or refineries The accreditation may be from authorities or statutory associations such as the Chinese Gold and Silver Exchange and the London Bullion Market Association, according to Haywood Cheung Tak-hay, president of the Chinese Gold and Silver Exchange Society Lenders will not accept gold bullion acquired from secondary market places, he adds. Source