Chinese firm joins Narok gold dispute amid fraud claims

The petition challenges the government’s abrupt cancellation of Bao Gold’s mining license and a subsequent police blockade of its mining operations.

Tianjin Hongfengyuan claims that Bao Gold fraudulently obtained its mining licence through forgery of documents of Li Zongfeng, a director of Tianjin Hongfengyuan.

“The petition relies on a purported mining ‘licence’ irregularly bearing the name of (Tianjin Hongfengyuan) Li Zongfeng, which he categorically states is a forgery, a nullity, and a fraudulent document,” reads the court papers.

In the suit, Tianjin Hongfengyuan alleged that the contested mining licence bearing Mr Li’s name was a nullity and had been used by Bao Gold’s official to “defraud investors and malign” the company’s reputation.

“The purported licence is a forgery deployed to defraud investors and to malign Mr Li’s name and that of the company (Tianjin Hongfengyuan), an act that is both malicious and criminal,” said Li Zongfeng in an affidavit.

Bao Gold denied the allegations, dismissing Tianjin Hongfengyuan’s claims as a “smokescreen” to derail its constitutional petition against the Kenyan government.

The petition is challenging whether the government acted lawfully when it removed Bao Gold’s mining licence from the cadaster portal–an online platform for all stakeholders in the mining sector in Kenya to engage directly with the Ministry of Mining. Bao Gold alleges that this removal happened without notice.

It wants the court to examine whether it was lawful for the government to deploy police to blockade a lawful operation without a court order. According to Bao Gold, these actions amounted to a breach of its constitutional rights.

However, Tianjin Hongfengyuan’s application to join the case revealed startling claims touching on shareholding in the two entities.

Tianjin Hongfengyuan insists it holds a beneficial stake in Bao Gold Hill Kenya Limited through a 2020 share transfer agreement.

However, Bao Gold’s General Manager, Qiu Chengfu, countered that Tianjin Hongfengyuan’s name does not appear in the company’s official shareholder register.

“The applicant is, in law, a stranger to the shareholding of the company. They may have a contractual claim against the purported transferor of the shares, but they have no direct legal equitable interest in the company itself as a shareholder,” Qiu argued in court documents.

"The interest of Tianjin Hongfengyuan is completely overshadowed by the primary constitutional contest between the petitioner and the State."

The dispute mirrors an earlier case in Narok where Tianjin Hongfengyuan sued Bao Gold over shareholding rights. That case was dismissed on jurisdictional grounds, raising questions about whether the current application amounts to relitigation.

In her ruling, Justice Gacheru acknowledged Tianjin Hongfengyuan’s claims of prejudice if excluded from the case pitting Bao Gold against the government.

"The proposed interested party has demonstrated an identifiable stake in this petition," she ruled, allowing Tianjin Hongfengyuan to formally join the suit.

The decision sets the stage for a high-stakes legal showdown as Bao Gold Hill Kenya Limited continues its fight against the Kenyan government’s revocation of its mining license, a move it claims was done unlawfully without due process.

→ [email protected]