Sierra Leone Parliament exposes corruption in China Kingho’s deal

Fritong Post Investigating Team: Sierra Leone Telegraph: 13 September 2020:

As the Parliamentary Committee on Transparency and Accountability continues to probe Sierra Leone’s National Minerals Agency (NMA), more questions than answers have emerged regarding the circumstances under which four large-scale mining licenses were granted to China Kingho Company Limited.

It was revealed during last Tuesday’s parliamentary committee hearing, that no proper due diligence was done before awarding the mining licenses to the company to undertake large-scale mining operations in Sierra Leone.

It was further established that the parent company, China Kingho Energy Group, is bankrupt with a net worth of a paltry 667,000 dollars.

The complex and seemingly opaque structure of the parent company, prompted lawmakers to inquire into the application details of its subsidiaries in Sierra Leone. The investigations found that the four subsidiaries in Sierra Leone have defaulted on the terms and conditions of their license agreements and violated certain provisions prescribed in the Mines and Minerals Act of 2009.

China Kingho Mining Company Limited, Mass Energy Mining Company Limited, Northern Mining Company Limited and Southern Mining Company Limited are all subsidiaries of China Kingho in Sierra Leone.

These subsidiaries are in arrears of 4.9 million dollars due to the Government of Sierra Leone.

The evidence adduced shows that since the companies were granted four large-scale mining licenses in 2014 they have not yet started mining operations because they are either bankrupt to undertake large-scale mining operations or simply cannot attract a financier to partner with.

In a letter addressed to the National Minerals Agency, the managing director of China Kingho stated that the projects required huge capital investment for the construction of railways and port facilities.

The letter reads: “We have approached several partners in this regard but it has been extremely difficult to get the much-needed capital…We are constrained to get dependable partners to commence work with.”

The company then decided to relinquish one of its licenses (the Southern Company Limited) and pleaded with the NMA to waive off the penalties attached to the outstanding payment of 4.9 million dollars.

It was further revealed that the company did not fulfill certain criteria for the award of large-scale mining license under the Mines and Minerals Act of 2009.

The Committee on Transparency and Accountability inquired into whether China Kingho has the adequate financial resources, technical competence and experience to carry on effective mining operations in Sierra Leone, a precondition for the award of large-scale mining license stipulated in section 108 subsection 3 of the Mines and Minerals Act of 2009.

The Committee exposed one of the shareholders/directors of China Kingho who happens to have two different identities. It was revealed that this individual bears the name Gilbert Zao but has a completely different name on the mining license application document.

The Committee perceived there was some form of corruption in the awarding of licenses to China Kingho Company Limited.

The Members of Parliament suspected the Minerals Advisory Board was either influenced or remained complicit in its decision-making process to approve large-scale mining licenses to China Kingho.

The committee quizzed the NMA boss to get the facts but he denies any wrongdoing.

Members of the Committee frown at the Environmental Protection Agency, National Minerals Agency and Ministry of Mines and Mineral Resources for not performing due diligence on China Kingho before awarding those large-scale mining licenses.

The lawmakers are suspicious of the decision-making process and are anxious to probe deeper to unearth whosoever benefitted from such mining approval decision.

Sierra Leone is endowed with vast mineral resources. But these resources have not been harnessed to promote national prosperity and an efficient, dynamic and self-reliant economy.

Since the discovery of diamonds in the 1930s, Sierra Leone’s mineral wealth has been largely plundered. The plunderage of these natural resources was identified as one of the major factors that ignited the civil war.

Many of those who took up arms attributed their struggle to the high incidence of poverty and unemployment exacerbated by massive corruption and abuse of power by the ruling elites. They blamed the governing elites for being selfish and insensitive to the plight of the masses.

During the Consultative Conference on Peace and Security in April 1999, the then British High Commissioner to Sierra Leone – Mr Peter Penfold observed:

“The tragedy of Sierra Leone is that her people are among the poorest in the world while the country is among the richest.  The reasons for this are entirely man-made. Other countries in the world are poor because of natural disasters, few resources, unfertile territory or bulging populations. Not so in Sierra Leone. Just a relatively few people are responsible for the misery and hardship suffered by so many.”

7 Comments

  1. Benjamin Jone say—“ The same backdoor and bad deal that was done for Kingho that has been exposd is what your so-called reputable company was guilty of. The government is asked by an international Court to pay compensation to the company as the contract (whether good or bad) was awarded by the last government on behalf of Sierra Leone.”

    Hahahaha, what do we have here? Could it be another ill-informed, derange, delusional, GREEN TOAD with uncontrollable impulses, subliminally seeking to gain RELEVANCE? Hey Benjamin, it appears you failed to read the memo. This intellectual glorious platform is highly intolerable to FAKE NEWS.

    Now, is it even logical to you for a renowned international court of chambers to institute penalties or compensatory measures to a plaintiff on flimsy basis as you asserted? Do me a favor, below are links pertaining to the litigation of SL mining vs Salone government. Allocate some time to educate yourself on the subject matter, instead of exposing your IGNORANCE in this glorious intellect forum. One last thing, please explain to this glorious platform why the 2 POAPA ministers (Rado Yokie and Priscilla Schwartz) who instigated and defended this charade against a major investor have now been shown the door, if not for sheer their INEPTITUDE and ARROGANCE.

    https://jusmundi.com/en/document/decision/en-sl-mining-limited-v-sierra-leone-order-sunday-8th-september-2019

    https://slmining.com/2020/02/18/statement-on-icc-arbitral-tribunal-3/

  2. The banana republic, with its philosophically deprived, global puppet leaders strikes again. These people are who judeo-christians would refer to as pegans back in the day, for they are unduly stripped of any characteristic that is deemed godly or principled. These ungodly, deceitful, anti Africans are so self destruct that they seem to wholeheartedly hate the people who they are supposedly looking after. It’s a wholly doozy..

    None of this surprises me though, as things such as this are inevitable in a banana republic stratosphere. I mean what do you expect from a nation state whose so called macroeconomy prowess is solely based on one which is thousands of miles away? How does this truly works? Can somebody help me here, because I’m dumbfounded if I am to be honest?

    Picture a full house built in the middle of a rainforest, but the intended roof for the house is left ions of miles away from the rainforest; however, the owners of the house still persist that rain must not fall into the house.

  3. “Thanks to extremists within the PAOPA regime who managed to chase away the only reputable mining company in the nation, SL mining company……” Young4na.

    Here, here here. The same backdoor and bad deal that was done for Kingho that has been exposd is what your so-called reputable company was guilty of. The government is asked by an international Court to pay compensation to the company as the contract (whether good or bad) was awarded by the last government on behalf of Sierra Leone.

    Was the contract in favour of the country? No. But the country is obliged to honour it. You think that the POAPA government does not want money no matter how small to implement their projects? They do but this idea of allowing bad investors lining the pockets of corrupt politicians while reaping the country off is not something to celebrate as you are implying. But what can we expect from your ilk?

  4. They are just making a fuss out of nothing. These guys are not serious about the development of this tiny and rich country. They are coming up with all kinds of distraction in an effort to elude themselves from the public eye, as they are presently facing the music of corruption in Parliament. Their immediate priority now is to try and deceive public perception that they are not the second most corrupt institution in the country – second to the Police. There should be an international body to investigate these dubious parliamentarians who are the main hindrance to the country’s development. The ACC cannot be trusted to investigate these shady group, because it (ACC) is just as corrupt as these parliamentarians.

    Mining companies are not one million dollars enterprises – one is talking about hundreds of million of dollars here. After discovering the difficulties that these set of Chinese Companies are facing – in terms of raising the necessary capital – the best reaction for the government should have been to assist these companies to enable them to attract the appropriate investors to kick start these companies. Unfortunately, although this government is making too much noise about diversifying industries, the plight of the ordinary individual in benefiting in such initiatives is not taking on board. The problem in the development of this country is the short-sightedness of the elite group – solely interested in making a fast buck – who cannot see onto the thinking of sustainable development.

  5. Foreign investors have no respect or regard for countries that are known to be corrupt. That you can secure lucrative deals by just holding clandestine meetings in few dark rooms or hotel lobbies, and bribing few government officials to sucure government tenders. Lets say the government of Sierra-leone, by extention have lost 4 million dollars in taxable income owed by this Chinese company and its subsidiaries. How did they managed to secure this deal without going through the rigours and protocols of due diligence set out by government white paper on tenders?

    These corrupt government officials in grey suits might have been given few hundred thousand dollars and fashionable gold watch. Thats it, the deal is secured. In the process denying Sierra Leone of millions of dollars in lost tax revenue. The domino effect of that is, the hospital or road, that much needed power to boost energy supply,those government workers waiting for their salaries, that parent struggling to feed his or her family has to suffer because of few greedy fat cats that don’t have any interest to develop Sierra Leone for the benefit of all.

    And when they are caught out and called to answer for their actions, they always go back to their well rehearsed refrain, blame the APC government, or blame officials in the SLPP government. This blame game goes on, and it all depends on whichever party is in power. These foreign investors will never dream of behaving like that in a western European country. Why is one rule for African countries like Sierra Leone, and a different rule for the rest of the world? Corruption. Because these Chinese companies know they will get away with it in Sierra Leone, by paying bribes to our coruupt polticians.

  6. “ It was further established that the parent company, China Kingho Energy Group, is bankrupt with a net worth of a paltry 667,000 dollars.”

    With usually a criminal intent and personal enrichment objective, our corrupt politicians have always prefer to sign backdoor deals with illusive Chinese companies as opposed to western companies. Thanks to extremists within the POAPA regime, who managed to chase away the only reputable mining company in the nation, SL mining. Not only has our nation been deprived of much needed revenues, the government of Sierra Leone will now have to pay millions in dollars to compensate SL mining in damages. A display of STUPIDITY and ARROGANCE at the highest level.

    • Thanks Young4na for putting it so starkly. Now is time for action for the ACC. Here is a case that is opened and closed. Will they go after the chief executives of the chinese companies? A big FAT NO. This is Sierra Leone, the capital of poverty in the world. So if you have the means, our corrupt establishment will make sure you never see a courtroom or the slamming of a police cell room door, let alone prison.

      Yes in any civilised country, where the rule of law is the main pillar of how things are done, surely, anyone who was present in that room when this nefarious deals were made on behalf of the people of Sierra Leone, has a case to answer. The Chinese companies and their chief executives will escape justice or fines because they are not members of a political PARTY, or a particular tribe in Bio’s political vendetta world.

      Let’s just close our eyes and imagine these are Sierra Leoneans operating in China, will they get away scot free, I wouldn’t think so. No where else but Sierra Leone. We are blessed with natural minerals but cursed for having greedy politicians as our leaders. It takes one individual to change the fortune of a country. And president Bio, has shown where his interest lies – in the Bling, Bling world where 1% of the population, spend all the resources of the country through corruption on behalf of the 99%. What a travesty of justice. WAKE UP MY FELLOW SIERRA LEONEANS!

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