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What next for Chinese Construction firm Zhongmei as AfDB’s ban over Corruption comes to an End

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On April 17, 2020, the African Development Bank (AfDB) announced a 12-month conditional non- debarment of Zhongmei Engineering Group Limited, an engineering company registered in Uganda.

AfDB’s office of Integrity and Anti- Corruption discovered that Zhongmei was involved in deceitful practices during a bidding process under the Road Sector Support Project 5.

Investigations established that while Zhongmei submitted a bid for the tender for the Upgrading of the Rukungiri-Kihihi-Ishaka/Kanungu Road in Uganda, the company misrepresented its date of incorporation.

DIRTY PAST

AfDB’s decision to suspend Zhongmei came high on heels of a Parliamentary directive against the engineering firm to refund shs, 272.7 mil­lion advanced to it for compensation of Uganda Na­tional Roads Authority (UNRA) projects.

UNRA advanced the money to Zhongmei Engineering to compensate individuals affected by the project constructions, however, the company owners including Yu Qianming channeled the money to a fixed account to accrue interest and subsequently make profits.

Hon Abdu katuntu who chaired (then) Committee on Commission, Statutory Authorities and State Enterprises (COSASE) said Zhongmei had engaged in fraud and the only way government was to recover the money was through name and shame.

He added that however, COSASE has no powers to try or prosecute these Chinese since Parliament isn’t a prosecution agency but they had to make sure that individuals affected by UNRA projects received their money as compensation.

Equally, the African Development Bank said that during the conditional non-debarment period, Zhongmei Engineering Group Limited remains eligible to participate in African Development Bank Group-financed projects provided it undertakes a corporate integrity compliance program in accordance with the Bank’s Integrity Compliance Guidelines.

The Bank warned Zhongmei that the conditional non-debarment will convert to a sanction of debarment with conditional release, and the company will then become ineligible to participate in African Development Bank Group-financed projects until the conditions for its release are met.

What Next?

The Road Sector Support Project 5 where Zhongmei participates most is financed under the African Development Fund, an entity of the African Development Bank Group.

After a year of suspension, has this Chinese firm learnt any lessons and what losses could it have incurred in the process.

Yu Qianming, one of the directors of Zhongmei when contacted by website for a comment on the way forward as the suspension comes to an end grilled our reporter on how TrumpetNews obtained his contact.

He added that, this is an old story. “May be you can talk to my lawyer,” he said.

However, he declined to avail to us his lawyer’s details insisting that contacting him (Yu Qianming) is invasion of privacy.

“It’s about my personal privacy. No one has power to disclose my personal contact to public,” he said.

While Chinese companies are feeling the pressure of anti-graft and tax evasion crackdowns at home, some are also facing similar campaigns abroad as African countries try to stamp out corrupt practices.

In the past four years, a number of Chinese-owned companies have landed in trouble with investigating agencies for tax evasion.

Others have been accused of bribing their way to winning lucrative infrastructure contracts.



Source – Trumpet News

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