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Shanghai Gold Exchange denies connection with fraudulent manufacturer

SHANGHAI Gold Exchange today denied a media report that it was connected with a supplier who has allegedly cheated loans with fake gold bars.

A Caijing report on Monday accused Boyuan Mining Co, a metal producer based in Lingshan, Henan Province, who used to produce gold-plated tungsten bars, has caused loss of more than 10 billion yuan (US$1.45 billion) during the past decade through fraud.

The report referred the producer as one of the suppliers of Shanghai Gold Exchange since 2010, due to its expansion on assembly lines of gold production.

"Boyuan Mining Co is not on the list of licensed suppliers," said an announcement made by the exchange. "Gold ingots, gold bars and silver ingots traded in Shanghai Gold Exchange have been gone through strict inspections,"

Shanghai Gold Exchange has 24 suppliers on gold bars, 26 suppliers on silver ingots nationwide, along with 40 suppliers for gold ingots domestically and abroad, according to the exchange.

Boyuan Mining Co has never been on the list since the exchange opened for trading in 2002, spokesperson from Shanghai Gold Exchange told Shanghai Daily today.

The Caijing report said that Boyuan Mining Co managed to produce a type of gold-plated tungsten bars weighing five kilograms with 62 percent of tungsten and 38 percent of gold since 2005. The bullion price surged more than 30 percent in the year of 2007, marking its biggest rise since 1979.

Caijing said the company used those fake gold bars as collaterals to obtain loans from several credit unions in both Henan Province and Shaanxi Province. Main suspects have been detained by the Police in May, 2016, the report added.

Tungsten is an industrial metal that weighs nearly the same as gold but costs a little over 7.5 yuan per kilogram, while the bullion closed Tuesday at 2,751.9 per kilogram at Shanghai Gold Exchange.


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