Friday, July 1, 2022

Lied, damned lies and BDC

The Botswana Development Corporation (BDC) executive managers and their friends at Shanghai Fengyue weaved a web of lies and deceit to help a briefcase company with no business track record win and keep the multimillion Pula glass manufacturing plant project in Palapye ÔÇô a forensic audit has revealed.

A forensic audit commissioned by the BDC board smoked out a corporate machine so mired in lies and deceit that the future of the Fengyue Glass Company Botswana is being called into question.
The men behind Shanghai Fengyue, the company that is in partnership with BDC in the Botswana Glass Manufacturing plant, lied about their background, falsified their credentials and inflated their worth.

A Mr. William Wu who claimed to be a shareholder in Shanghai Fengyue China lied to the BDC that Shanghai Fengyue China had agreed to go into a joint venture company with Botswana. It later emerged that Mr. Wu had lied.

BDC executive managers, however, hid the lies from the board and allowed Wu to set up a briefcase company ÔÇô Shanghai Fengyue British Virgin Island to replace Shanghai Fengyue China as BDC partner.
Mr. Wu also claimed that Shanghai Fengyue China had 20 years experience in doing business in Africa. It has since emerged that Shanghai Fengyue has no experience in manufacturing glass and was only a small merchant company.

BDC Managing Director, Maria Nthebolang, indicated that an ITC check had been completed on Shanghai Fengyue China and “it was a small trading company not involved in the manufacture of glass”. It was agreed that Shanghai Fengyue would be a financier along with BDC and both parties would seek a technical partner.

BDC executive and Shanghai Fengyue, however, went behind the back of the board and appointed a brief case company- Shanghai Fengyue BVI- as a partner and Shanghai Fengyue China as EPC contractor.
Although Mr. Wu claimed that the company had the capacity to build the multi-million Pula glass manufacturing plant in Palapye, it later emerged that Shanghai Fengyue China is a small company with a capital base of US$ 600 000. The forensic audit raises “serious doubt about its ability to participate in a project of this size”.

It further emerges how BDC executive managers helped the briefcase company onto a gravy train fuelled by corruption, lies and deceit. The forensic audit found irregularities in the way directors of Fengyue Glass Botswana (which includes some BDC officials) applied for a letter of credit.

The directors of Fengyue Glass Botswana applied for a letter of credit to the value of USD 44, 3 million (P290 million) when they were aware that BDC had only approved a loan amount of P179 million. The letter of credit was subject to the following security (even though the principal borrower was Fengyue Glass Botswana): Cash ÔÇô USD 22 million by BDC and corporate guarantee of USD 22 million by BDC. Fengyue Glass applied for a letter of credit significantly in excess of the loan amount, secured by an authorized guarantee, and the BDC board was kept in the dark.

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