Saturday, September 26, 2020

Embattled Shanghai Fengyue Glass Company auctioned

Shanghai Fengyue Glass Company, the Engineering, Procurement and Construction services (EPC) contractor behind the controversial Palapye glass plant, will be auctioned off following failure to pay suppliers for more than P2 million worth of construction material.

The company, which was given the EPC contract under mysterious circumstances despite failure to obtain and present a performance bond, has been attached together with its directors Hujiaoming and Hanwen Wang following failure to pay Steelbase the sum of P2,642,288,66 – excluding legal and deputy sheriff’s costs.

The embattled company has not presented BDC with a performance bond, which is a financial tool used to guarantee that in the event of a developer or contractor’s default, funds are available to finish the construction. The lapse in financial security was kept away from the board by BDC managers.

Francistown deputy sheriff, Stanley Nombolo, who is acting on instructions from Tsholofelo Mvungama, of Makuyana Legal Practice, told The Sunday Standard they have attached, among other things, 11 caravans which are being used as offices and accommodation at the site, forklifts, air conditioners , dining rooms tables and cars. All these goods, he said, were attached at the site where Palapye Glass factory is under construction.

Besides acting on instructions from Makuyana Legal Practice, Nombolo said that he has also attached some goods from the same company on instructions from Mogale Legal Practice who were acting on behalf of Merimex Holdings. Merimex is owed P327,592,82.

He said that goods which were attached on this action include cranes, tipper trucks and JVC equipment, amongst others. Nombolo says the sale of the goods will follow in seven days, should the company and its directors fail to settle the debts in full.

“We have given them seven days in accordance with law to settle the debts failing which we will auction their goods,” he said.

Nombolo says if the attached goods are finally sold off, construction of the factory will be affected as the machines they have attached are the ones used for the construction.

A forensic audit commissioned by the BDC board unveiled startling information about the project contract award: Shanghai Fengyue Glass China was the initial partner presented to the BDC board. As it turns out, Shanghai Fengyue British Virgin Islands is now the partner with BDC in Fengyue Glass Botswana while Shanghai Fengyue China is now the Engineering, Procurement and construction services (EPC) contractor. At the time of going to press, the BDC board was still awaiting an explanation on the change of shareholder from Shanghai Fengyue China to Shanghai Fengyue British Virgin Islands and on how Shanghai Fengyue China ended up as EPC contractors.

Sunday Standard investigations have turned up information that Shanghai Fengyue Glass (British Virgin Islands) was only registered on July 2007, the same month Shanghai Fengyue Glass China presented their quotation to BDC. Shanghai Fengyue Glass has no track record in any area of business and its capacity to provide funding to this type of project was unknown. More worrying, Shanghai Fengyue Glass (BVI) has not been able to raise its full contribution to equity for the partnership with BDC in Fengyue Glass Botswana. The BDC board has demanded to be provided with proof of payment and date of payment of equity contribution by Shanghai Fengyue British Virgin Islands as stipulated in the BDC board resolution of June 2007, and the shareholders Agreement.

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