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A significant number of gold-themed wealth management products issued by Kinghood Holdings Group have experienced widespread payment defaults since November, with an estimated total of approximately CNY70 billion to CNY80 billion (roughly USD9.9 billion to USD11.4 billion) involved. Exclusive sources reveal that these defaults have drawn regulatory scrutiny, as investors report missed redemptions and increasing liquidity pressures related to the well-known gold jewelry processing firm. Authorities in Shenzhen have initiated an investigation, and the company’s operations appear to have largely come to a halt.
On-site visits to the company’s headquarters in Shenzhen revealed that most office spaces had been vacated, and the lease agreement had been terminated. Contact with the firm’s brand general manager and a branch manager of its high-net-worth client-focused wealth management subsidiary confirmed that both had resigned.
A Shenzhen-based employee of Kinghood disclosed that since the financial crisis surfaced, the company has delayed salary payments, leaving some staff still unpaid for August wages. Payments to suppliers have also been disrupted, affecting ongoing operations.
Further inquiries to the local Office for Combating Illegal Fund-Raising in Yantian District confirmed that the situation initially involves a sum in the range of CNY70 billion to CNY80 billion. A staff member mentioned that Kinghood’s senior executives are still in China, and the government has established a special task force to address the collapse of the company’s wealth management products, though specific resolution plans are still under discussion.
One affected investor told us that as early as June, some of Kinghood’s wealth management products had already failed to redeem on time. Rather than resolving these issues, the company offered investors three so-called “upgrade plans” that promised higher returns in an effort to delay repayment.
Starting in November, however, the number of overdue products expanded rapidly. A legal expert representing Kinghood investors reported a recent surge in inquiries, most relating to missed redemptions. The affected products include gold entrusted purchase-and-sale agreements and limited partnership deals with private equity funds. Most of the raised capital was invested in Kinghood’s gold recycling projects or corporate equity ventures.
“Without exception, Kinghood promised relatively high annualized returns on these products,” the lawyer explained, adding that the company employed various strategies to bypass legal requirements when assessing investor eligibility.
A legal specialist from Beijing Circuit Law Firm noted that although some projects were supposedly targeted at specific investors, in practice, they collected funds from the general public under promises of principal and interest at fixed rates.
“Taking public deposits is a licensed banking activity,” he said. “Kinghood and its partner entities may have been conducting similar activities without proper licensing, which could be considered illegal public fundraising.”
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