In recent months, the well-known Fujian Ke Guan Jewelry Co., Ltd. (referred to as Ke Guan Jewelry) has garnered widespread attention due to reports of a financial scandal since early October. On November 26, news that “Investors unable to retrieve 480,000 yuan from a well-known jewelry company” made its way to the top of the trending list. Chinese media reports that the headquarters of Ke Guan Jewelry in Fuzhou have shut down, with both of its stores locked up tightly – indicating recent closures.
According to a report by the “Daily Economic News,” a visit to the Fuzhou headquarters of Ke Guan Jewelry revealed locked doors, darkened interiors, and an absence of employees. Subsequent visits to the two Ke Guan Jewelry stores also found the doors to be securely locked. Nearby shop owners disclosed that these two stores had recently closed. Two employees from Ke Guan Jewelry declined interview requests.
Originally named Fujian Ke Guan Jewelry Co., Ltd., the company was established in 2012 and went public on the New Third Board in 2016. In January of this year, Ke Guan Jewelry announced the termination of its listing on the national SME share transfer system. Despite this, Xiao Jichang was still recognized as an “Outstanding Entrepreneur in Fujian Province.”
Since early October, various social media platforms have been circulating reports of Ke Guan Jewelry’s financial scandal, with many investors claiming they are unable to withdraw gold from the company.
On October 13, Xiao Jichang, the legal representative and actual controller of Ke Guan Jewelry, made a video statement saying, “Do not be misled by fake clients, fake lawyers, or bloggers looking for traffic.” On October 7, he mentioned in a video that “the entire incident is being handled.”
Just over a month after Xiao Jichang expressed his views, on November 17, the Taijiang Sub-Bureau of the Fuzhou Public Security Bureau announced that Ke Guan Jewelry was under investigation for suspected illegal activities. However, the announcement did not provide specific details on the nature of Ke Guan Jewelry’s alleged illegal activities.
On July 6 of this year, the Fujian Enterprise and Entrepreneur Association held a meeting to commend 138 “outstanding entrepreneurs” in the province, with Xiao Jichang, Chairman of Ke Guan Group, being recognized.
According to the official WeChat account of Ke Guan Jewelry, the company was founded in Fuzhou in 2012 and currently operates over 30 stores with more than 400 gold and jewelry consultants.
In interviews, Ms. Chen (pseudonym) stated that she had invested a total of around 480,000 yuan, yet she has not received her principal amount back.
Ms. Zhang mentioned that she has approximately 138,000 yuan in investments that she has not been able to retrieve or convert into gold.
Both Ms. Chen and Ms. Zhang noted that when signing contracts with Ke Guan Jewelry, sales personnel promised to provide additional gold based on the quantity of gold ordered, distributed at regular intervals.
Ms. Zhang explained that the more gold purchased from Ke Guan Jewelry, the higher the yearly gold gifts given.
Ms. Chen added that the value of the gifts could be converted into cash, as she had received cash equivalents of the gifts, directly transferred to her by the salesperson. Chat records provided by Ms. Chen with a Ke Guan Jewelry salesperson indicated a transaction from last September, where the due amount was 115,800 yuan, and 13.9 grams of gold were gifted, valued at approximately 5,000 yuan.
In addition to receiving gold gifts, Ke Guan Jewelry also offered discounts on purchases. Screenshots provided by Ms. Chen showed conversations with sales staff at Ke Guan Jewelry where a discount rate of 96.62% was offered.
As of now, aside from those interviewed, many customers of Ke Guan Jewelry have been unable to retrieve their gold or receive refunds. Despite repeated attempts to contact Ke Guan Jewelry and Xiao Jichang from November 21 to 25, phone calls have gone unanswered. Questions regarding the company’s operational model, financial discrepancies, and how the current issue of customers being unable to withdraw gold is being addressed were sent via text message to Xiao Jichang but have yet to receive a response.