Interesting news about gold....
China finds $15 billion of loans tied to falsified gold deals
China's national chief auditor has discovered $15.2B in falsified gold transactions that have been borrowed from banks since 2012. Chinese traders and investors are known to borrow against commodities such as gold, copper and soybeans, and most of it is valid trading. However, the Chinese audit office has found many gold processing firms which borrowed based on fake transactions in the gold market. Further investigation may result in new restrictions on commodity financing.
Spot checks on 25 companies that process bullion, such as jewellers, showed they made a combined profit of more than 900 million yuan by using the bank loans to take advantage of the difference between onshore and offshore interest rates, as well the appreciation of the Chinese currency, according to a report published this week on the National Audit Office's website.
Chinese firms could have locked up as much as 1,000 tonnes of gold in financing deals by the end of 2013, the World Gold Council said in April, indicating a big slice of imports has been used to raise funds due to tight credit conditions, rather than to meet consumer demand.
At current prices, that would be worth about $42 billion.
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The audit office also said it found problems with the country's coal, corn and cotton reserves.
A spot check of 12 emergency coal reserve sites found that average monthly stocks were about 30 percent lower than the target volume in 2011, and 18 percent lower than stipulated in 2012, the report said.
The quality of these reserves was also a problem.
Some 2.43 million tonnes of cotton stocks, accounting for 27 percent of the country's total reserves, were kept in open storage as of June 2013, while some 70 percent of corn imported by China Grain Reserves Corp (Sinograin) contained impurities exceeding the stipulated 3 percent, the report said. |
