from China Topix:
China’s National Audit Office’s has reported that Chinese bullion companies using falsified gold transactions have defrauded the government of US$15 billion (CNY94 billion).
It said the widespread fraud involved 25 bullion processing companies across China that also made an illegal profit of US$145 million.
Western analysts, however, believe the extent of the scam is much larger. Goldman Sachs estimated that over US$80 billion was advanced in gold backed loans alone.
Government auditors said the bullion companies used the loans to profit from the difference between offshore and onshore interest rates. The companies also used the loans to take advantage of the appreciation of the Chinese renminbi or yuan.
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