Over 5 Tons of Gold Missing as Top Executives of Overseas Chinese Holdings Flee Abroad

October 21, 2024 — A large number of investors gathered outside the A Tower of Xizi International Center on Jingtan Road in Hangzhou, Zhejiang, to protest. Their investments in gold products under Overseas Chinese Holdings (OCH) faced a repayment crisis, resulting in heavy losses. (Provided by the interviewee)

[November 17, 2024] The financial scandal involving the gold products of Overseas Chinese Holdings Group Co., Ltd. (OCH) continues to escalate. Recent reports indicate that three senior executives from the company have secretly fled abroad, leaving behind the mystery of "5 tons of missing gold." Employees and investors have suffered financial losses amounting to tens of millions (RMB), carrying debts that could ruin their futures.

Three Executives Flee; Over ¥4 Billion in Gold Leasing Unpaid

On November 9, Chuangxing Resources announced that its actual controller, Yu Zengyun, was under investigation for suspected fundraising fraud.

On November 17, Phoenix Financial Media’s Storm Eye reported that 46-year-old Yu, who had only acquired control of Chuangxing Resources less than two years ago, was at the center of this scandal through his long-operated OCH. The company’s main businesses included funds, private equity, and asset management, with its most well-known financial product being "gold leasing."

According to internal data provided by employees from September 2, just before the crisis, the total unpaid funds amounted to over ¥7 billion, with more than ¥4 billion tied to gold leasing. At a gold price of ¥700/gram, this is equivalent to over 5 tons of gold “vanishing into thin air.”

Meanwhile, Yu and two other senior executives have secretly fled abroad. As the scandal continues to unfold two months later, the mess left by OCH now falls on the shoulders of employees and investors.

In an era of generally low bank interest rates, many people believed in OCH’s claims of collaboration with "China Gold," which promised annualized returns of 7%-8%. They went so far as to borrow money or convince friends and family to invest. Many employees even transferred their wages directly into OCH’s financial products, only to discover later that they were working for free while accumulating debt that could consume their lives.

Internal Chaos Erupted Two Months Ago

OCH veteran employee Liu Qing recalled that on September 5, a ¥50 million gold leasing order purchased by a state-owned enterprise through the "Qiaoxing Tianxia" app expired without repayment. The colleague handling this order initially thought it was a delay in large-scale bank transfers. They waited until 8:30 p.m., but the funds still weren’t credited. The news quickly caused an uproar in the employee chat groups.

Because many OCH employees had also invested in the company’s financial products, the sudden "anomaly" made everyone extremely nervous.

Liu Qing explained that under normal circumstances, the company had a clear T+10 repayment schedule for customers. However, a risk warning point was set at T+3, allowing employees to communicate with financiers if payments were delayed, thereby preventing defaults. The ¥50 million gold leasing order had already exceeded the T+3 threshold without repayment, a situation that had never occurred before.

That evening, employees bombarded the phone of Qiaoxing Tianxia’s operations director, Yu Zhiwei. Liu Qing also called and recalled Yu’s bewildered reaction. Yu was at a movie theater and responded, “Why is everyone calling me? I don’t know what’s happening.”

The following morning, employees rushed to the company and confronted Wang Yuan, the executive president of OCH Fund, who usually dealt with such crises. Liu Qing said Wang appeared calm and claimed he had contacted the company’s top two leaders, Yu Zengyun and Yang Yuxiao. Yu could not be reached, but Yang responded, saying he would negotiate with the new chairman of China Gold. Wang reassured employees to continue working as usual and promised updates after leadership meetings. However, after the meetings, Wang provided no definitive answers.

Many employees and clients were still unaware of the gravity of the crisis and held onto faint hope, but that hope soon shattered.

On September 7 at 10 p.m., the company’s top two leaders became completely unreachable, prompting employees to file a police report.

By September 9, Chuangxing Resources announced that Yu was missing, bringing OCH’s financial troubles into the public eye.

Media reports soon revealed that Yu and Yang had fled abroad. Operations Director Yu Zhiwei, who was initially still reachable, also disappeared shortly thereafter.

OCH has fallen into a "leaderless" state, but many employees have had to remain at their posts to calm investors. Employee Liu Hong stated that in the two months since the collapse, he has continued going to work as usual. While his original role was to liaise with clients, after the collapse, his job shifted to pacifying them. In the past two days, he even traveled to meet clients one-on-one in other regions. These clients were his relatives, and he felt compelled to explain the situation to them face-to-face and offer his apologies.

In September, the company paid only social security contributions and skipped wages entirely. By October, even the social security payments stopped. What devastated employees most, however, was not the lack of wages but the loss of their life savings. Many had invested their savings in OCH’s financial products, with some even transferring their salaries directly into the Qiaoxing Tianxia app.

Liu Hong said he initially invested ¥200,000. Encouraged by the 7% returns and confidence in the company’s assets, he gradually increased his investment to over ¥10 million, including one ¥4 million deposit backed by a mortgage on his home. A colleague reportedly invested ¥50 million. Internal estimates suggest that employee investments accounted for one-fifth of the ¥7 billion in unpaid funds.

Middle-aged employees like Liu Qing were left utterly directionless after their millions vanished. Their family savings were wiped out, and mortgaged homes now faced foreclosure. Once part of the middle class, Liu found himself plunged into poverty overnight.

When clients protested, Liu accompanied them, but most of his time was spent lying at home. Sleepless at night, he would doze on the couch during the day. Reflecting on the two months since OCH’s collapse, Liu said, “It feels like a dream. I still can’t face reality.”

Since October 21, investors have launched large-scale protests to demand their hard-earned money. Almost every day since then, investors have gathered outside Tower A of Xizi International Center, located at No. 9 Jingtan Road, Shangcheng District, Hangzhou, Zhejiang.

"5 Tons of Gold" Mysteriously Disappear?

The developments in this case have taken a bizarre turn. Employees’ trust in the company was shattered when investigators revealed that the company’s data pointed to a "scam."

On September 23, China Gold issued a statement clarifying that it had never engaged in any business dealings with the Overseas Chinese system (OCH). The announcement also strongly accused the company of forgery, noting that the seals used in the agreements differed significantly from the authentic seals of China Gold, Zhongxin Leasing, and Zhongjin Jewelry Beijing Company (subsidiaries of China Gold). The fake seals lacked anti-counterfeiting codes.

Police investigations revealed that most of the "investment" funds in OCH’s financial products were funneled into affiliated shell companies. Media reports exposed irregularities in OCH’s gold projects, including the Dingxin Debt project. Its financier, Guohao Huijin, was flagged by the Shenzhen Financial Supervisory Bureau as a suspected shell company in the financing and leasing industry.

A series of successive blows left employees struggling to cope. They had believed that the company they joined had a strong and reliable background.

What baffled the employees even more was that the fugitive Overseas Chinese Fund president, Yang Yuxiao, had a wife who also worked in the company's sales division. The two had just married last year. According to a system screenshot seen by Liu Qing, Yang's wife had purchased over ¥16 million in gold leasing products through Qiaoxing Tianxia at its peak, with over ¥8 million still unpaid when the collapse occurred.

Despite the collapse of the Overseas Chinese system, which included projects beyond gold, such as Maotai investments, the largest financial losses were tied to the "China Gold" leasing investment products. According to internal data provided by employees from September 2, shortly before the collapse, the "China Gold" financing raised ¥1.789 billion offline through the Dingxin Debt project and ¥2.6 billion online through Qiaoxing Tianxia, totaling over ¥4 billion. At a gold price of ¥700/gram, this equated to over 5 tons of gold.

China Gold Denies Involvement; Employees Search for Evidence

Although China Gold has explicitly denied any collaboration with OCH, employees and investors remain skeptical. They have been gathering materials and evidence to determine whether funds flowed to subsidiaries of China Gold.

A widely circulated video among employees and investors shows someone logging into the Shenzhen Rural Commercial Bank’s online banking system and querying transactions. Between September and October 2023, several transactions were allegedly sent to China Gold Group Jewelry (Beijing) Co., Ltd. A digital receipt displayed in the video shows a ¥75 million transfer from Guohao Huijin (the financier behind OCH’s Dingxin Debt products) to China Gold Group Jewelry (Beijing) Co., Ltd.

Another screenshot, dated September 4, 2023, from Shenzhen Rural Commercial Bank shows a ¥50 million transfer from Guohao Huijin to the same recipient.

However, police warned against believing these videos and transaction records, calling them "fake." When contacted about the authenticity of the video, economic investigation staff in Hangzhou’s Shangcheng District stated that the case is under investigation, but no further details were disclosed.

Meanwhile, employees found discarded invoices in the company’s finance department. One showed that Overseas Chinese Fund Management Co., Ltd. purchased approximately 20 kilograms (about 40 pounds) of gold, valued at ¥8.48 million, from China Gold Group on February 26, 2024. However, buying gold does not necessarily indicate a gold leasing agreement, leaving the evidence chain incomplete.

Employees have been trying in vain to prove a close relationship between China Gold and OCH. For instance, Overseas Chinese Commercial Group Co., Ltd., an OCH subsidiary, was once among China Gold’s top ten shareholders. In February 2021, when China Gold went public, Yang Yuxiao, CEO of Overseas Chinese Fund, attended the IPO ceremony as a strategic partner. Media reports from 2017 highlighted a strategic cooperation agreement signed between China Gold Group and OCH in Beijing, complete with news articles and photos. However, these instances cannot serve as direct evidence of financial cooperation between the two parties.

Until further details are disclosed by investigators, the existence of the gold investments, the fate of the funds used to purchase gold, and the ultimate whereabouts of investors’ money remain a mystery.

Editor: Fang Xiao