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Monday, 24 August 2009

Namibia Widens Probe Over Chinese Payments to Domestic Company



By Chamwe Kaira

Aug. 6 (Bloomberg) -- Anti-graft authorities in Namibia said they widened a corruption probe into a domestic company that allegedly received payments in return for influencing the award of government contracts.

Teko Trading CC, a Windhoek-based company, is being investigated for “possible irregularities” over a tender to extend a railway line in northern Namibia, Anti-Corruption Commission Director Paulus Noa said in an interview yesterday.

Teko is owned by Teckla Lameck, Namibia’s public service commissioner and her business partner, Kongo Mokaxwa. Last month, the two were charged with corruption in a Windhoek court after allegedly receiving a payment to help secure a contract for Nuctech, a state-owned Chinese company, to supply airport security scanners to the country. They have been imprisoned while the ACC continues its investigation and are expected to apply for bail on Aug. 10, Noa said.

Neither Lameck nor Mokaxwa have entered a plea. Their lawyer, Sisa Namandje, was unavailable to comment today because he is in court all day, an assistant in his office said when contacted by Bloomberg News.

The Namibian, a Windhoek-based newspaper, on July 29 quoted Lameck as saying in an affidavit that the allegation that Nuctech’s 42 million Namibian dollar ($5.24 million) payment to Teko was corrupt or constituted fraud “is devoid of any legal basis.”

Rail Contract

In the latest case, China National Machinery Import & Export Corp. is alleged to have agreed to pay Teko 10 percent of the final contract price in return for the Namibian company’s assistance in securing a contract to build the rail line on the Angolan border, Noa said.

“We are investigating the matter,” Noa said yestereday. “There is no evidence yet. We are trying to find out if there is evidence of irregularities.”

China National Machinery, a state-owned company based in Beijing, was founded in 1950, a year after the Communist Party took power. In the 1950s, China imported entire factories from the then-Soviet Union to help its industrialization. The company now helps build infrastructure projects including railroads and power plants in countries such as Sri Lanka, Sudan and Brazil.

No one answered the general line at the company’s Beijing headquarters when Bloomberg News called yesterday seeking comment.

Nuctech, which won a $55.3 million contract in 2007 to supply the scanners to Namibia, allegedly paid $12.8 million to Teko, according to the anti-graft commission.

President’s Son

Chinese President Hu Jintao’s eldest son, Hu Haifeng, was president of Nuctech until last year, when he was promoted to party secretary of Tsinghua Holdings, which controls Nuctech, Agence France-Presse reported last month.

Hu’s son is not a suspect in the case, Noa said in July. Investigators want to talk to him to get information about the company, Noa said.

Search engines in China, including Google Inc.’s local site, have blocked news on the Nuctech case.

The restrictions show the extent to which the government is working to contain news of the case, which may embarrass President Hu as he cracks down on official corruption.

To contact the reporter on this story: Chamwe Kaira in Windhoek via Johannesburg at pmrichardson@bloomberg.net.

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