On April 23, 2024, The Paper reporter learned from consumers of the Hangzhou flagship store of China Gold Group Gold and Jewelry Co., Ltd. (600916, China Gold) that as the first franchise store of China Gold in the country, their compensation for losses has not been fulfilled after 4 years of thunderstorm in the Hangzhou store.
On February 6, 2021, Zhejiang Economic Television News reported that some Hangzhou citizens invested in the so-called "Jinyoujin" gold leasing business at China Gold's flagship store in Hangzhou, or purchased options for "Jinjinbao", but encountered payment problems.
One of the victims, Chen Ming, a citizen of Hangzhou, told The Paper that the principal of the 7 million yuan he invested could not be redeemed, and the store issued a repayment plan to Chen Ming, that is, to repay 500 yuan every month. Chen Ming told reporters that the repayment plan of 500 yuan a month was also interrupted after two years, and he has not received a penny since then.
The Hangzhou flagship store involved in the case is the third flagship store of China Gold in China and the first franchise store in China. A consumer in Hangzhou said: "We believe in China Gold's state-owned enterprise brand before we buy its custody services. ”
After the collapse of the first franchise store, China Gold said that the custody business was carried out in violation of regulations for the flagship store and had nothing to do with the head office.
In December 2022, the Hangzhou Fuyang police filed a case against Sheng Xiangzhong, the franchisee of the Hangzhou flagship store and the actual controller of Zhejiang Zhongjin Gold Jewelry Sales Co., Ltd. (hereinafter referred to as Zhejiang CICC), on suspicion of illegally absorbing public deposits. On February 28, 2024, in an exchange meeting with consumer representatives, Fuyang prosecutors said that the case had entered the stage of review and prosecution.
In December 2023, after another thunderstorm at China Gold's Beijing R&F Plaza franchise store was widely reported, China Gold announced in early April that it had decided to advance payments to relevant consumers to protect their legitimate rights and interests. The victims of the Hangzhou flagship store are not included.
On April 22, The Paper learned that the court had officially accepted the case of Shengxiangzhong and Zhejiang Jinjinbao Investment Co., Ltd. (hereinafter referred to as Jinjinbao Company, a subsidiary of Zhejiang Zhongjin) on suspicion of illegal storage absorption, and the trial time is to be determined.
The No. 1 franchise store in the country and the cover of China's gold are in full bloom
In early April 2024, The Paper reporter came to No. 446-1 Fengqi Road, Xiacheng District, Hangzhou. The advertising slogan on the outside of the building has been stripped away, and traces of "China Gold" are faintly visible.
The Hangzhou flagship is the third flagship store of China Gold in China and the first franchise store in the country.
On August 25, 2007, China Gold's flagship store in Hangzhou, located on Fengqi Road, Yan'an Road, was officially opened, which is the third flagship store of China Gold in China and the first franchise store in China.
As a franchisee, the actual controller of Zhejiang CICC was in the limelight for a while.
In 2018, he was featured on the cover of the fifth issue of China Gold & Jewellery magazine, a subsidiary of China Gold.
In 2008, Sheng Xiangzhong became the general agent of China Gold Zhejiang. Data map
In the cover article titled "In Glory: Chasing Dreams of Gold", the magazine details the gold business in Prosperity and his contribution to Chinese gold.
From the opening of the first China gold direct store in August 2007 to the end of 2017, the cumulative sales of Zhejiang Zhongjin in Shengxiang have exceeded 25 billion yuan.
The article said, "In 2008, the sales of the Hangzhou flagship store exceeded 100 million yuan for the first time, and 700 kilograms of gold were sold. With good sales performance, in 2008, Sheng Xiangzhong became the general agent of China Gold Zhejiang. ”
The article revealed that before the establishment of Jinjinbao Company, Sheng Xiangzhong began to promote the application of the Internet in sales in Zhejiang CICC. "In order to enable consumers to buy gold on the PC side, Zhejiang CICC launched the VIP gold card. On November 6, 2015, the platform of Jin Youjin (formerly known as Jinbao, later renamed Jin Youjin) was officially launched. ”
China Gold is not the first media to pay attention to Sheng Xiangzhong and Zhejiang Zhongjin.
On November 13, 2015, Xinhuanet Zhejiang Channel reported that on November 6, the "Golden Treasure" platform online press conference hosted by Zhejiang Golden Treasure Investment Co., Ltd. and the Summit Forum on Promoting the Online and Offline Integration and Development of the Gold Industry was held in Hangzhou International Conference Center (Intercontinental Hotel).
According to China.com, on September 4, 2016, Song Xin, then Secretary of the Party Committee and General Manager of China Gold Group Corporation, and Chen Weixiong, then General Manager of China Gold and Jewelry Co., Ltd., visited the Hangzhou flagship store in person.
On November 19, 2017, the "2017 Gold Investment Summit and the 2nd Anniversary of Jinyoujin and the 10th Anniversary of China Gold Dengzhejiang" jointly sponsored by Zhejiang Zhongjin enterprises (including Zhejiang Jinjinbao) were held in Hangzhou InterContinental Hotel.
Among those who stood on the platform for the event were Chen Xiongwei, then Secretary of the Party Committee and Chairman of China Gold Group Gold and Jewelry Co., Ltd., Zhang Yongtao, then Vice President and Secretary General of China Gold Association, and Tao Minghao, then President of China Gold News.
When introducing its distribution model in the prospectus, China Gold said that the company's franchisees can be divided into three types: provincial franchisees, direct franchisees and terminal franchisees. There are two levels of franchisees (provincial franchisees and terminal franchisees) in provinces and regions where the issuer has a large sales scale, and in these regions, the company directly conducts daily business dealings with provincial franchisees, and provincial franchisees directly carry out daily business dealings with terminal franchisees.
According to the prospectus, Zhejiang CICC has become a provincial-level franchisee of China's gold franchise channel since 2010, and has basically stabilized in the top five customers of China's gold during the reporting period, and has been among the top ten customers. In 2017, due to the new large-value purchase customers in the key customer channel, it was not ranked in the top five customers, and in 2018, it was re-ranked in the top five customers.
Thunderstorm and liquidation plan
In February 2021, Zhejiang Economic Television News reported that Chen Ming, a citizen of Hangzhou, said that since 2016, the staff of China Gold's flagship store in Hangzhou have promoted a wealth management product called "Jin Youjin" to his family.
In short, customers deposit their physical gold at home in the China Gold Hangzhou flagship store, or spend money to buy gold in the store and store it in the flagship store, and the flagship store will give a rebate of 8% of the gold price every year.
From 2016 to 2019, Chen Ming's family invested more than 7 million yuan to purchase the "Jin Youjin" gold leasing business.
In November 2019, Chen Ming's family suddenly received a notice that there was a financial problem in China's gold store, and the investment of 7 million yuan could no longer be redeemed.
According to public information, the Tianshui Market Supervision Institute of the Xiacheng District Market Supervision Bureau of Hangzhou City said that since the beginning of 2020, the firm has received complaints from investors that the investment in the "Jin Youjin" gold leasing business in this China Gold Hangzhou flagship store has not been paid in time after maturity.
According to a news report by Zhejiang Economic Television, the regulatory authorities interviewed the relevant person in charge of China Gold's Hangzhou flagship store in mid-2020. The latter said that in November 2019, Sheng Xiangzhong, the company's legal person, was arrested by Taizhou Economic Investigation for suspected false tax bills, and all company accounts under his name are currently frozen by judicial associations. More than 1,000 customers are involved, and the amount involved is about 110 million yuan.
After nearly a year of defending his rights, the store issued a repayment plan to Chen Ming, that is, to repay 500 yuan every month.
Chen Ming said that at the beginning of 2020, Zhejiang Zhongjin informed the victim that Sheng Xiangzhong owned real estate, equity and other assets, and planned to liquidate the listed company's equity by replacing it with third-party funds. "For a considerable period of time, the third party did not make a settlement and repayment action against the victim, and it was over. ”
In November 2020, the agent of Zhejiang CICC issued a repayment agreement, requiring the victim to give up petitioning and reporting the case, and promising to repay the debt within three years. Chen Ming said: "Because the agreement has neither secured collateral, nor is it bound by liability for breach of contract, let alone signed by Sheng Xiangzhong, it was resisted by the victims' representatives. ”
Another victim, Shen Hai, tried to resolve the dispute through judicial channels.
On October 29, 2021, the Xihu District People's Court held in a civil ruling in which Shen Hai's wife was the plaintiff that, according to the relevant judicial interpretations, if the people's court accepts a case as an economic dispute, if it finds that it is not an economic dispute case and is suspected of an economic crime, it should rule to reject the prosecution and transfer the relevant materials to the public security organ or procuratorate.
On January 21, 2022, the Hangzhou Intermediate People's Court stated in its ruling of the second instance of the case that on January 18, 2022, the Xihu District Court transferred the relevant materials of the case to the Xihu Branch of the Hangzhou Municipal Public Security Bureau on the grounds that Zhejiang CICC may have committed contract fraud or other criminal offenses.
The Shen Hai couple's home is located in Gongshu District, Hangzhou. On April 27, 2022, the Hangzhou Gongshu District Public Security Bureau stated in a "Notice of Inadmissibility" that the registered address of Zhejiang Zhongjin is in Xihu District, and the actual controller, Sheng Xiangzhong, has been sentenced to 13 years in prison by the Taizhou Intermediate People's Court in December 2021 for the crime of falsely issuing special VAT invoices. The cases of suspected illegal fundraising or contract fraud and other economic crimes involving the public are under the jurisdiction of the Xihu Public Security Bureau, where the company is registered.
Cutting: China Gold declares that it has nothing to do with the custody business
Chen Ming told The Paper that when the victims tried to find China Gold Group, China Gold responded: This is the behavior of the franchise store and has nothing to do with China Gold.
On January 16, 2020, China Gold Group Gold & Jewellery Co., Ltd. stated in a "Notification Letter" that Zhejiang Huangjinbao Investment Co., Ltd. (hereinafter referred to as "Huangjinbao") used the Chinese gold brand to carry out custody business in violation of regulations, "seriously damaging the image of China Gold Brand and the legitimate rights and interests of our company." "It is hoped that the other side will take effective measures to eliminate the impact and bear all legal consequences on its own.
After the thunderstorm of the Hangzhou flagship store, China Gold claimed that the franchisee carried out custody business in violation of regulations, damaging its brand image and legitimate rights and interests, but until the thunderstorm of the Beijing flagship store, the franchisee had been operating the gold custody business. Data map
Tianyancha data shows that Huangjinbao Company is a holding subsidiary of Zhejiang CICC. In the eyes of consumers, the purpose of China Gold's issuance of the notification letter is to cut off the relationship with China Gold's flagship store in Hangzhou and clear its own responsibility.
According to Shen Hai, the Hangzhou flagship store was the first store to thunder, and consumers signed contracts with Zhejiang Zhongjin and Jinjinbao respectively. "No matter where you sign a contract, it is based on trust in the brand of China Gold, and in the three years since the incident, China Gold has always claimed that it does not know, who believes it?"
Chen Ming said that China Gold had arranged for people to count the losses of the victims four years ago, "and after they went back, there was no follow-up, and the matter became an entanglement between the victims and Sheng Xiangzhong." ”
A featured hosting business that "helps sell miracles".
The prospectus of China Gold's initial public offering provides a detailed description of the company's gold leasing and custody business.
According to the prospectus, the custodian gold business means that customers can choose to deposit gold bar products from the issuer for proper custody and get them back after the escrow expires. The Company may use the escrow funds during the escrow period in accordance with the escrow agreement signed by both parties.
On November 22, 2012, Beijing Daily reported that the new "gold custody service" launched by China Gold Flagship Store has attracted many citizens with gold investment needs to try it because of its convenience, safety and peace of mind.
According to the report, gold custody is a special form of purchase, that is, the full payment is paid at the time of purchase, but the goods are not picked up, but the spot is picked up after a period of time.
According to the screenshot provided by the interviewee to The Paper, on March 1, 2013, China Gold Network published an article titled "China's Gold Characteristic Custody Business Helps Sales Miracle" (written by Tian Jingang).
According to the article, on the morning of February 21, Mr. Li bought 12 kilograms of investment gold bars from China Gold at one time. Amazingly, apart from a gold custody contract, Mr. Li walked out of the flagship store empty-handed and with ease.
After the thunderstorm of China Gold's Beijing franchise store was widely reported, the surging news reporter logged on to the China Gold website again, and the article could not be queried.
On June 20, 2018, the National Audit Office of the People's Republic of China disclosed in detail the audit results of China Gold Group Co., Ltd.'s financial revenue and expenditure in 2016 in Announcement No. 33. The audit detailed the financial and operational management problems of China Gold's headquarters and its seven subordinate units.
According to the announcement, from July 2015 to December 2016, CICC Jewelry violated the rules to carry out non-hedging gold trading and deferred delivery business, resulting in a loss of 10.128 million yuan.
On the same day, China Gold Group issued an announcement on the rectification of its 2016 financial revenue and expenditure audit results, which stated that "the business has been stopped for the illegal implementation of non-hedging gold trading and deferred delivery business by its affiliated enterprises." ”
As a customer of China Gold, Shen Hai believes that the "gold trading backorder business for non-hedging needs" in the audit report is the later gold custody business.
A few years later, the hosting business exploded again.
Guangming.com reported that in December 2023, a number of consumers received a WeChat message from the clerk of China Gold's Beijing Shuangjing store, and overnight, the store and gold went to the empty building together. According to incomplete statistics, more than 80 consumers handled the gold custody business in the store, and the gold with a total value of more than 30 million yuan disappeared.
Franchise stores account for more than 97%, who will control the risk?
As one of the victims, Ms. Guo told The Paper reporter that she did not know that Shuangjing Store was a franchise store before buying, "General consumers will not distinguish between direct sales or franchises, and everyone is going to the signboard of China Gold." ”
Franchisees are important partners of China Gold. Combing through China Gold's "Prospectus" and annual reports over the years, the franchise model has brought significant benefits to China Gold.
Like its jewellery peers, China Gold's sales model mainly includes a direct sales model and a distribution model, of which the distribution model is mainly a franchise store channel.
Speaking about the partnership at the China Gold Franchisee Partner Conference and Supplier Strategy Seminar in Shenzhen, Guangdong Province on November 16-17, 2023, Liu Kejun, Chairman of China Gold, said: "As long as China Gold and its partners stick to the original intention of cooperation and stick to a blueprint to the end, the flower of friendship will surely shine more brightly in the new era and new journey." ”
One gold seller said: "The circle of running a gold industry is very small, and what is more precious than gold is reputation. More than ten years ago, we relied on our credibility to take a few catties of gold from our customers and pay later, but now no one dares to do this. ”
From the perspective of consumers, it is difficult for ordinary gold sellers to gain consumer recognition, let alone storage business, the seller said. "This requires the blessing of big brands such as China Gold and Shandong Gold. ”
According to the China Gold prospectus, as of the end of 2017, the end of 2018, the end of 2019 and the first half of 2020, the number of franchise stores was 1,805, 2,119, 2,852 and 2,688 respectively, and the scale of franchise business revenue was 8.504 billion yuan, 14.371 billion yuan, 18.715 billion yuan and 8.367 billion yuan respectively, accounting for 30.18%, 35.16%, 49.02% and 54.30% of the company's revenue in each period respectively.
According to the 2022 annual report, China Gold has a total of 3,642 stores, of which 105 are directly operated stores and the remaining 3,537 are franchised stores, accounting for about 97.12%. At the same time, China Gold added 21 directly operated stores and 325 franchised stores that year.
In 2022, the revenue of the distribution model in the form of China's gold franchise stores will reach 18.321 billion yuan, and the revenue of the direct sales model will reach 28.537 billion yuan, with the former accounting for 39.1% of the total revenue. The gross profit margin of the direct sales model is 2.46%, and the gross profit margin of the distribution model is 6.03%, which is still higher than that in 2021.
China Gold said that it has established a relatively complete management system and internal control system for the franchise business, established a headquarters, regional management system and a standardized store operation management system, standardized management of the qualification evaluation, business standards, store opening process, store image, training, management, sales, price system, advertising and other aspects of the franchise store, and set up a special department to supervise the daily operation of the franchise store.
According to its prospectus, due to the large number of franchised stores and wide geographical distribution, the operation and management are independent of the issuer, and if there is a franchisee operating in violation of regulations, it may have an adverse impact on the company's brand image and operating performance.
After the thunderstorm of the franchise store in Beijing, on April 1, 2024, China Gold issued an announcement that Yang Moumou, the actual controller of the company involved, has been criminally detained by the public security organs and entered the judicial process. At the same time, China Gold decided to advance payment to the relevant consumers to protect their legitimate rights and interests.
China Gold alleges that the Beijing R&F Plaza store operated by franchisee Beijing Sandingyuan Gold Jewelry Co., Ltd. (Sandingyuan) violated the "Franchise Agreement for Exclusive Stores" signed with the company and carried out the so-called "worry-free pre-booking of gold bars" business without authorization, and was unable to redeem the products purchased by consumers, causing a bad impact. Yang Moumou, the actual controller of Sandingyuan, has been criminally detained by the public security organs and entered the judicial process.
Chen Ming and Shen Hai said: "We, the victims in Hangzhou, hope that China Gold can replicate the way they handled the franchise stores in Beijing to Hangzhou. ”
In December 2022, the Fuyang Police in Hangzhou filed a case against Jinjinbao Company on suspicion of illegally absorbing public deposits. According to the audio recording, on February 28, 2024, in an exchange meeting with representatives of rights defenders, Fuyang prosecutors said that the case had entered the stage of review and prosecution.
On April 22, the staff of the Fuyang District People's Court replied that the court had officially accepted the case of Sheng Xiangzhong and Jinjinbao Company suspected of illegally absorbing deposits, "As for the trial time, it has not yet been determined." ”
In an interview with The Paper, a staff member of the office of the secretary of the board of directors of China Gold said, "Investors from Hangzhou have contacted us, and we are dealing with this matter." ”
On April 17, Yu Shaoming, a lawyer at Zhejiang Zhijiang Law Firm, said: "I contacted China Gold again today, and they were not positive. ”
(The names of the consumers or investors interviewed in this article have been changed.)