BEIJING — To the likely consternation of diplomats in both Beijing and faraway Windhoek, a newly minted initiative by Namibia’s government to root out official corruption has snared an early catch: three people who, Namibian prosecutors charge, helped win a lucrative contract for a Chinese company recently headed by the son of Hu Jintao, China’s president.
The charges against the three, including one Chinese national, have yet to be heard in court. There is no public evidence that President Hu’s 38-year-old son, Hu Haifeng, or other high officials of the company, Nuctech Company Limited, knew of the Namibian dealings.
But mere reports of the charges have already prompted Chinese government censors to block Internet surfers from searching for news about the younger Mr. Hu, Namibia or Nuctech, according to the California-based Internet site China Digital Times.
Separately, the office of Namibia’s prosecutor general, Martha Imalwa, said she had traveled to Beijing to request that Mr. Hu be interviewed in the case as a witness, but not as a suspect.
Until last year, Mr. Hu was president of Nuctech, a Beijing-based maker of advanced security scanners used in airports, customs warehouses and other traffic points. He has since been elevated to Communist Party secretary of Tsinghua Holdings, the state-controlled firm that runs Nuctech and about 30 other businesses.
Namibia prosecutors accuse Nuctech’s Africa representative, 39-year-old Yang Fan, and two Namibians of joining in a bribery scheme that secured a $55.3 million contract in May 2008 to install Nuctech scanners at customs inspection points across Namibia.
Most of the cost was to be borne by a so-called soft loan — usually a loan at below market rates or with other favorable terms — that China’s government granted Namibia on the condition that it purchase scanners from Nuctech.
Namibia’s government paid about $12.8 million to Nuctech in February. But prosecutors allege that most of that money was quickly transferred to a Namibian company listed as a Nuctech consultant, and then split among Mr. Yang and the two Namibian defendants.
The case came to light because of a new money-laundering law that requires Namibian banks to routinely report large money transfers to investigators. Prosecutors said that the three defendants in the Nuctech case appear to have spent much of the money on what officials called an enormous spending spree.
Nuctech has offered to send officials to Namibia to aid in the investigation, but has not commented publicly. The three defendants were to appear in court in Windhoek, Namibia’s capital, on Wednesday for a bail hearing.
Nuctech was created in 1997 as an offshoot of Tsinghua University, a Beijing campus with a heavy emphasis on technology where both President Hu and, later, his son were engineering graduates.
The company has risen rapidly to become one of the world’s top providers of security scanning equipment, supplying about 50 nations, including the United States. In late 2006, the company won a contract to install advanced scanners at all 147 of China’s airports to detect potentially dangerous liquids.
While the company’s products have won praise from users in places as diverse as Australia and Norway, Nuctech’s business practices have come under increasing scrutiny abroad.
The European Union is investigating whether the company has used soft loan deals from the Chinese government to effectively lower its prices and undercut competitors. South Africa’s Mail & Guardian newspaper reported that Nuctech’s agent in a $380 million scanner sale there was a company implicated in corrupt contracts involving the nation’s scandal-plagued Parliament. In the Philippines, legislators charged that the government’s customs agency overpaid in 2006 and 2007 when it reached a $150 million no-bid agreement, also financed by a soft loan, to install Nuctech scanners at transit points there.
Namibian critics also contend that their government grossly overpaid for the scanning equipment and that much of the excess payments ended up in private hands, including those of some Namibian politicians. Namibia’s inquiry into the deal is ongoing.
John Grobler contributed reporting from Windhoek, Namibia.
Source:Assetrecovery
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