Botswana Development Corporation executives broke all the rules in the book and ignored informed advice not to go into partnership with Shanghai Fengyue Glass Company.
Information passed to the Telegraph reveals that the Botswana Embassy in China sent BDC a fax message on 15th May, informing them that despite information from Shanghai Fengyue that they had international distribution network, official briefs from Chinese government authorities proved otherwise.
“We have passed on your requirements to the Authorities of Economic and Trade in Shanghai. After checking the database of the Shanghai Foreign Investors, Shanghai Foreign Trade Operators could not find Shanghai Fengyue Class Company,” states the fax message from the Botswana Embassy in Beijing.
In an apparent attempt to pad and embellish their international trade credentials, Shanghai Fengyue China had informed the BDC that they were a subsidiary of China Africa Trade and Commercial Development Corporation. The Botswana Embassy in China did a background check on China Africa Trade and Commercial Development Corporation (CATCDC) and informed BDC that Chinese authorities could not raise any information on (CATCDC).
BDC also used the credit rating firm, Experian Ltd to ascertain the credit worthiness of Shanghai Fengyue China. The information turned up by Experian revealed that Shanghai Fengyue did not have the capacity to handle a project the size of the Palapye Glass Manufacturing Plant. The report from Experian revealed that Shanghai Fengyue Glass Company China was a small company with a staff of nine people, a capital base of US $656,168 (less than P7 million) and was involved in trade and not manufacturing.
The report further stated that the maximum recommended credit for Shanghai Fengyue China was GBP 3000 (about P30 000) with a medium risk.
Despite the unfavourable credit rating and risk profile, BDC went ahead and presented Shanghai Fengyue China to the board as their partner.
In a curious twist, it emerged that Shanghai Fengyue had actually never agreed to go into partnership with BDC, contrary to what a Mr. Wu, who claimed to be a board member of the Chinese company, had told BDC. In another twist, it turned out that Mr. Wu was neither on list of shareholders nor the management of Shanghai Fengyue China.
BDC, however, still decided to go into partnership with him. Mr. Wu, who then set up a briefcase company called Shanghai Fengyue British Virgin Islands, which replaced Shanghai Fengyue China as BDC partners under mysterious circumstances.
According to the forensic audit report, the BDC executive management was aware of all the developments and kept them away from the board.