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Ownership of China Wu Yi’s Kenya arm thrown into doubt
Mr Qiu Liangxin (left) the managing director China Wu Yi with Mombasa deputy governor Hazel Katana (center) together with Mr Yang Yue, the president of Fu Zhou city in China in this picture taken on March 14, 2016.
Ownership of construction firm China Wu Yi’s local arm has been brought to question following revelations that its two registered directors are all Chinese, despite its recent claim that it is a homegrown Kenya company.
Official records at the registrar of companies show that China Wu Yi, which is government-owned back in China, has listed only two individuals, Yue Shengli, a Chinese national from Fuyzhou City in Fujian Province, and Li Jiaxin, who is designated as its authorised person in Kenya, as its directors.
Names and number of other shareholders have, however, been concealed and the company designated as private despite its well-known identity as a state-owned firm in China.
Companies are usually required to provide a full list of shareholders at registration, their nationality and stake in the company together with the name of its auditors and company secretary – all of which China Wu Yi has not provided.
The conflicting information at the registrar of companies and China Wu Yi’s website have raised questions as to the true ownership of the firm, and its connection with the Chinese government.
China Wu Yi administrator Tom Naoke told the Business Daily on Friday that the firm is majority owned by the Chinese government with a few minority stakeholders who are all Chinese nationals.
Efforts to get confirmation from the Chinese Embassy as to China Wu Yi’s ownership were, however, fruitless after its spokesperson, Mao Yizong, threw the ball back to the firm’s court. He asked that he be contacted after China’s National Day celebrations on Saturday.
“I believe Wu Yi will contact you for that. I am occupied by meetings. Hopefully, we can meet after our national holiday,” Mr Yizong said. China Wu Yi, which participated in the construction of the Thika Superhighway, the University of Nairobi Tower, Mama Lucy Kibaki Hospital and several apartments in Nairobi has also announced plans to put up an iron and steel factory in Kenya.
Engineering News Record, a global infrastructure development website last year ranked the company in position 154 among the top 250 international contractors worldwide, based on annual revenue from big ticket deals.
Last June, China Wu Yi was named the winner of a Sh10.4 billion contract to construct the 135 kilometre Garsen-Witu-Lamu Road, which may in future be expanded to link Kenya to Somalia.
The multi-billion shilling deal has, however, hit a brick wall following a standoff between the Kenya National Highways Authority (KeNHA) and the Public Procurement Administrative and Review Board (PPARB) over its award.
PPARB has overruled KeNHA) and ordered that bids for the tender be re-evaluated and one of China Wu Yi’s rivals, H Young, be considered a Kenyan contractor.
Mr Naoke insists that China Wu Yi has never presented itself as a Kenyan owned company even when bidding for government contracts where Kenyan firms are given priority over foreign companies.
China Wu Yi maintains that it is owned by the Chinese government, and that it only subcontracts part of its deals to local firms as required by procurement laws.
Mr Naoke insisted that the information at the companies’ registry is wrong, as China Wu Yi Company Limited is not privately owned.
READ: China Wu Yi firms grip Kenya roads with Sh16bn Waiyaki Way deal “How could that be? We haven’t filed anything like that. That is wrong information. China Wu Yi is 100 per cent Chinese owned with the Chinese government as the major shareholder, but we also have a few individuals with shares. The individuals are Chinese nationals,” Mr Naoke said.
The China Wu Yi administrator, however, did not disclose the names of the Chinese nationals he says are minority shareholders in the construction firm. “What we normally do is subcontract some of our work to local companies, but we are not a Kenyan company,” Mr Naoke adds.
Chinese companies have in the past decade bagged big infrastructure contracts in Kenya, pushing rival Kenyan and European firms to the periphery, mainly by quoting the lowest bids.
The mystery behind China Wu Yi’s ownership has elicited memories of another Chinese firm—China Road and Bridge Corporation (CRBC)—whose true shareholding remains unknown to date despite going through a Parliamentary investigation two years ago.
The file containing records of CRBC’s ownership at the companies’ registry in 2014 went missing shortly after Parliament started a probe to demystify the firm’s ownership after it emerged that two of the firm’s directors—Peter Gateri and Leonard Mwangi—were indigenous Kenyans.
Parliament suspected that the firm may have Kenyan citizens among its shareholders, but was unable to verify the allegations after its records went missing from the companies’ registry.
