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Monday
Sep282015

Kenya arrests two Chinese construction company executives for bribery 

Two senior managers of the China Roads and Bridge Construction Company were arrested in Kenya for allegedly giving bribes to highway authority officials to cover up the use of overloaded trucks.

The Chinese executives two were identified as Tang Ju and Liu Yabin.

They were detained on orders from the Kenya Ethics and Anti-Corruption Commission (EACC) following complaints that overloaded vehicles carrying construction materials for the standard gauge railways project were operating on the roads.

EACC officials said Tang allegedly offered a $1,000 bribe to an officer for the Kenya highways authority. Liu allegedly paid a $285 bribe to a highways authority official.

“Two trucks belonging to the China Roads and Bridge Construction Company were detained during a joint operation by Kenya Highways Authority and EACC officers, on Mombasa Highway . . . for overloading,” a statement from the commission said.

The two Chinese executives were released on bail pending trial.

China Roads and Bridge Construction is helping build the standard gauge railway project from Mombasa to Nairobi, a distance of about 400 kilometers (250 miles).

*     *     *

Allegations of bribery involving China companies have become common in Africa.

A few years ago, Kenya opposition lawmakers accused the government of ignoring tender procedures when it awarded a contract for the country's digital TV signal distribution to China's Pan African Network Group.

Last year, Tanzania accused Beijing-based China Communication Construction of corruption in connection to another port project. Prosecutors charged the former head of the Tanzania Ports Authority and his deputy with fraudulently awarding a bloated contract worth more than $523 million to CCC for a port expansion.

Tanzania abandoned the project after officials said costs billed by CCC were double those for similar port projects.

In 2013, the Zambia government terminated a $210 million closed circuit television camera contract with China's ZTE because of alleged corruption.

A government source said if the contract for traffic control had continued, Zambia could have lost $100 million through inflated billings.

In Algeria in 2012, ZTE and Huawei Technologies were convicted of corruption. The companies were banned from state telecoms tenders for two years for bribing executives at state-owned Algérie Télécom.

In that case, an Alegerian court sentenced three Chinese executives to ten years in prison in absentia for paying $10 million in bribes through offshore accounts in Luxembourg.

In 2011, Uganda blocked a $106 million fiber-optic cable funded by a loan from the Import and Export Bank of China because of alleged inflated costs.

________

Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

Hui Zhi is the Senior Manager for Content with ethiXbase Pte Ltd.

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