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In the late 1970s, college student Bart Kitner started trading scrap gold using a $700 loan. He refined and selling the resultant pure gold grain on to bigger players. Eventually, he was able to expand his business into other industrial areas and, by the late 1990s, into precious metals products.
In 1995 the website Kitco.com was launched providing market information — prices, trends, news.
Today, Kitco occupies more than two floors of a Montreal office building and two other offices in New York and Hong Kong.
Kitco News is the journalistic division of Kitco, reporting using articles and videos. Original coverage by Kitco News includes being one of the first organizations to break the story about the Gold Anti-Trust Action Committee's (GATA) lawsuit against the Federal Reserve, as well as focus pieces on issues such as conflict minerals in the Congo. In addition to this, Kitco News reports on price movements within the precious and base metals markets, and provides both fundamental and technical analyses.
Kitco has been featured and quoted in major American, Canadian and international publications.
Tax Issues and Creditor Protection
Among Kitco’s lines of business is the purchase of scrap precious metals. Kitco pays its suppliers sales taxes on these purchases and receives tax credits for the corresponding amounts. Alleging that some of these suppliers have not paid back the taxes owed to it, Revenue Quebec is holding Kitco responsible for these unremitted taxes. Revenue Quebec's issuance of assessments for these taxes has forced Kitco to file for creditor protection. Kitco strongly contests these assessments.
On June 8, 2011, the day after Revenue Quebec raided Kitco's headquarters, Kitco was granted CCAA creditor protection by the courts (similar to U.S. Chapter 11 bankruptcy protection). On November 6, 2014, the CCAA protection was extended again to June 18, 2015. The CCAA protection allows Kitco to continue under its existing management, with Richter acting as a Monitor. Around May, 2014 Kitco paid the majority of creditors in full, with others receiving partial payments (except Revenue Quebec).
Kitco Pool Controversy
Kitco offers unallocated precious metals accounts, called "Kitco Pool." Normally, unallocated precious metals account are like "IOU"s and backed by the "general stock" of the dealer. In the event of bankruptcy a pool holder would become an unsecured creditor of the company. Kitco addressed these concerns by stating that the Kitco Pool is 100% backed by physical precious metals, segregated from Kitco's own assets and belonging entirely to Kitco Pool customers.
Starting back in 2007, silver analyst Ted Butler voiced concerns over unallocated accounts including the Kitco Pool. In March, 2014 a blogger did some investigating and discovered that the Kitco Pool is no longer 100% backed by physical precious metals, not properly segregated from Kitco's own assets ($25M of the Kitco Pool was seized by Revenue Quebec in June, 2011), and Kitco Pool customers are not considered creditors in the ongoing CCAA proceedings. Such changes would be acceptable if customers were made aware of them; however, the changes were made surreptitiously. Therefore, some people are investing based on past reassurances without knowing the truth about the Kitco Pool.
Kitco rejects ARQ allegations.
- "Articles by Kitco News". Nasdaq.com. 15 March 2011. Retrieved 15 March 2011.
- "GATA". gata.org. Retrieved 15 March 2011.
- "Conflict Minerals: Is the Industry Ready?". World News. 16 December 2010. Retrieved 15 March 2011.
- "About Kitco News". Kitco News. Retrieved 15 March 2011.
- "Kitco Metals Inc. Restructuring Case".
- Van Praet, Nicolas (December 9, 2013). "Kitco Metals among gold traders facing Quebec tax fraud allegations".
- http://www.richter.ca/~/media/Files/Insolvency%20Cases/K/Kitco-Metals/CCAA%20Proceedings/Court%20orders/13-Order-8thExtension-contd-20141111.ashx?la=en Missing or empty
- 20th Monitor Report
- Butler, Ted. "Buyer Beware".
- "Changes in Kitco Pool Safety".
- Kitco rejects ARQ allegations