Commodities fraud in China has deepened, with China's chief auditor discovering $15b of loans backed by falsified gold transactions

Commodities fraud in China has deepened, with China's chief auditor discovering $15b of loans backed by falsified gold transactions. We've commented recently on the China port scandal and the potential it has to drastically cut bank financing into Chinese businesses. Today, the situation has deteriorated, with China's chief auditor discovering $15.2b of loans backed by falsified gold transactions, adding to signs of possible fraud in commodities financing deals. 25 bullion processors made a combined profit of more than 900 million yuan by using the loans to take advantage of the difference between onshore and offshore interest rates and the appreciation of Chinese currency. Public security authorities are also probing alleged fraud at Qindgao Port, where the same stockpiles of copper and aluminum may have been pledged multiple times as collateral for loans. (VIEW LINK)