Chinese Firm Embroiled in Namibian Corruption Scandal
July 23, 2009
In 2008, China’s state-owned firm Nuctech signed a contract with the Namibian government to supply security scanning equipment. The deal was worth nearly 39 million euros.
Namibia’s Anti-Corruption Commission says that Namibia made a down payment of some nine million euros. The money apparently came from a loan granted by China in 2007.
The Commission has found out that the down payment was then passed on to a private consulting company in Namibia called Teko Trading. This suggests that the money might have been a bribe to influence the authorities to clinch the deal.
Paulus Noa, the director of the Anti-Corruption Commission, said he had received information from the public saying that there were “some huge transactions of money taking place between Nuctech and Teko Trading. As a result, we started our investigation and we established that a substantial amount of money had been deposited into the accounts of Teko Company and that this money came from Nuctech.”
Three arrested so far
The Namibian police has arrested and charged three people so far. Two are the co-owners of Teko and the third is Nuctech’s Africa representative, Yang Fan. The Namibian authorities are also trying to get Hu Haifeng, the son of Chinese President Hu Jintao, to testify.
Hu Haifeng was president of Nuctech until last year. He has since become the party secretary of Nuctech’s parent company, Tsinghua Holdings, which controls over 20 other companies.
The Namibian authorities insist that Hu is not a suspect but would still like to question him.
“I would not say that Mr Hu is involved,” insisted Noa. “Up till now, we do not know who made the decision that the money should be paid to Teko. What we want to get from Mr Hu, or any members of the management of that company, is the information that can assist us with the investigation.”
Media blackout on case in China
Neither the Chinese government nor Nuctech have so far commented on the case. Moreover, there seems to be a media blackout on the case in China. Websites that post news about the probe are apparently blocked.
The probe in Namibia comes as widespread perception increases in China that the relatives of high-ranking Communist Party leaders misuse their political connections to become rich. There is speculation that 90 percent of China’s billionaires are the children of party leaders.
Joseph Cheng, an expert from Hong Kong’s City University, explained that there were two types of cynicism among ordinary people: “One is that if you are a senior leader you will not be touched. The other is that if senior cadres are prosecuted in these cases or sanctioned there is general speculation that it has to do with political struggle or political issues rather than corruption per se.”
Cheng added that there was still a lot to be done. “In order to deal with corruption very effectively,” he said, “the best way is to have democracy and genuine rule of law. However, short of genuine democracy and the rule of law, the Chinese authorities can at least allow media freedom so that the media can cover these stories and allow the existing People’s Congress system more power to examine the cases of corruption.”
Containing corruption, Cheng says, is crucial because it is one of the main causes of growing unrest in Chinese society.
Author: Disha Uppal
Editor: Anne Thomas