Namibians Say Inquiry on China Will Expand
BEIJING — Namibian prosecutors investigating allegations of kickbacks on government contracts with China have expanded their inquiry to include a Chinese contract to build a key railroad link, investigators said Friday, indicating that they suspect a pattern of corruption on deals with China.
Earlier allegationsof bribery involving a contract to supply Namibia with scanners at security checkpoints raised alarms in both Namibia and China because the company that makes the scanners, Beijing-based Nuctech Company Limited, was headed until late last year by the son of Hu Jintao, China’s president. Although there is no suggestion that President Hu’s son, Hu Haifeng, knew of the Namibian dealings, Chinese government censors have blocked China’s Internet users from reading or searching for any reference to the case.
Investigators have said they want to question Mr. Hu as a witness, not a suspect, in the case. Hu Haifeng was Nuctech’s president when the $55.3 million contract to supply the scanners was signed in May 2008, according to the company. He had been promoted to the position of Communist Party secretary of Tsinghua Holdings, which runs Nuctech and about 30 other businesses, by early this year, when Nuctech is accused of having paid $4.2 million in kickbacks to a Namibian front company.
On Friday, anticorruption investigators confirmed that they were investigating allegations that China National Machinery & Equipment Import and Export Company, or CMEC, had agreed to pay the same Namibian company 10 percent of the final contract price for help in sealing a deal to build a 38-mile-long rail link. The Namibian company, Teko Trading, was controlled by one of the nation’s public service commissioners, Teckla Lameck, and an associate, Kongo Mokaxwa. Investigators say the company existed only on paper.
Namibia’s acting head of railways protested at the time that non-Chinese competitors were willing to do the job for one-fourth of CMEC’s initial price of $144 million. When Namibia threatened to use competitive bidding procedures, CMEC agreed to lower its price to $61 million and this year was awarded the contract.
Ms. Lameck and her partner were jailed in July in Windhoek on charges of fraud, bribery and corruption stemming from the Nuctech contract. Their lawyer has denied any impropriety, describing payments to their bank accounts as “just business.”
A Chinese citizen, Yang Fan, was jailed on the same charges. He listed himself on government applications as Nuctech’s Africa representative and as Teko Trading’s marketing manager.
Investigators charge that once Nuctech received its first installment of money from Namibia, it transferred $4.2 million to Teko Trading. The two Namibians went on a spending spree, court records suggest. Mr. Yang, who is accused of receiving $2.1 million, bought property in South African golfing estates and transferred money to various accounts, the records indicate.
The payments from Nuctech to Teko Trading came to light under a new Namibian law that requires banks to report transfers of more than about $135,000. In an affidavit filed in court, a Namibian prosecutor said Nuctech had promised to pay Teko Trading an additional $8.6 million for bogus services related to provision of the scanners.
Financing for both contracts under investigation came largely from a long-term $100 million loan to Namibia from China’s Ex-Im Bank. President Hu offered the loan when he visited Namibia in February 2007, according to media reports.
Much like similar development loans from some Western countries, China’s financing required that Namibia pick Chinese companies for projects financed with loan proceeds. Some Namibian officials have said that requirement effectively stifled competition for the railway contract.
China has emerged as a major financier and developer of infrastructure projects in Africa.
Sharon LaFraniere reported from Beijing, and John Grobler from Windhoek, Namibia. Jonathan Ansfield contributed research.
