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Kitco is a Canadian company that buys and sells physical precious metals such as gold, platinum, palladium, and silver. It also runs a website for gold news, commentary, and financial market information.
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.
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.
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 rejects ARQ allegations.
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.
Starting back in 2007, silver analyst Ted Butler voiced concerns over unallocated accounts, including the Kitco Pool.
- "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.
- "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
- "Kitco continues to categorically reject all of the Agence du Revenu du Québec's allegations". www.newswire.ca.
- Butler, Ted. "Buyer Beware".