Wednesday, July 26, 2017

#Chinese investor in wrangle with #Uganda minister over a deal gone bad

A Chinese firm, claiming to have been cheated out of a multibillion rock deal, has appealed to President Museveni requesting for his urgent intervention.
China Road and Bridge Corporation (CRBC) is battling with a local company, Welt Machinen Engineering Ltd, for Kamusalaba rock in Lorengedwat sub-county, in Nakapiripirit.
Welt Machinen belongs to Ben Koriang and Felix Oroma, sons of Peter Lokeris, the minister of state for Minerals. Whereas CRBC maintain they need to extract gravel from the rock, Welt Machinen claims its intention is for commercial production of granite.
According to a letter dated June 29, 2017, CRBC warns that their harsh treatment by some government authorities could deter other foreign firms from investing in the country.
“The purpose of this letter is to request your intervention in this matter, which is affecting the company’s businesses in Uganda. As investors, we have executed work legitimately in the national interest; we should not suffer inconvenience of having to fight with speculators who want to take advantage of the court process as they have nothing to lose,” their letter partly reads.
The letter adds an intriguing twist to the legal battles between CRBC and Welt Machinen Engineering, over the ownership of Kamusalaba rock in Nakapiripirit district, which have been raging for more than three years now.
The Chinese firm says Welt Machinen is falsely claiming compensation amounting to Shs 9.15 billion from the Uganda National Roads Authority (Unra) for a contentious rock yet they (CRBC) had signed a memorandum of understanding with Nakapiripirit district administration, giving them ownership of the rock.
On December 20, 2016, CRBC secured a court order halting any payment of money to Welt Machinen Engineering by government until the case is settled.
The order also stated that Unra deposits Shs 21 billion (half of the Shs 42bn total valuation for the rock) with court not later than October 2017 as the main case is being heard.
But George Omunyokol, the lawyer for the Chinese firm, said at the weekend that they had got wind that Welt Machinen has been pressuring government to release part of the Shs 21 billion to the company, which contravenes the court order.
“Given the history of this file, where there were previous concerns raised by our clients, about the active processing of the contentious funds through the secretary to the judiciary, yet there was a general reluctance by the court to dispose of the application for the interim order, our clients are apprehensive that there might be a grim possibility of our client’s money being spirited away from court, in spite of an interim order, maintaining the status quo, being in force,” Omunyokol told The Observer on Saturday, July 22.
The Kamusalaba rock, according to a report by the ministry of Energy and Mineral Development, is valued at Shs 46 billion. Efforts to talk to Siraj Ali, the lawyer for Welt Machinen Engineering, were futile.

According to various documents tendered in court, the conflict between CRBC and Welt Machinen Engineering started in May 2013 shortly after CRBC signed a Memorandum of Understanding with the Nakapiripirit district leadership to extract gravel from Kamusalaba rock.
CRBC was supposed to pay Shs 50 million to the district. After the MoU was signed, Peter Lokeris claimed the rock was situated on his land. But the Lorengedwat sub-county leadership said the minister’s claim was false.
In August 2013, Ben Lokeris Koriang, the son of the minister, served CRBC with a letter informing the Chinese firm that Welt Machinen was the licensed mineral holder for Kamusalaba rock. Welt Machinen claimed that they wanted to commence commercial production of granite from the rock.
Koriang thus invited CRBC to a meeting to iron out the matter but the Chinese firm asked him to contact the Nakapiripirit district leaders. Welt Machinen instead sought the intervention of the commissioner for Geological Survey and Mines in the ministry of Energy.
On January 20, 2014, Edwards Kato, the acting commissioner Geological Survey and Mines, wrote to CRBC informing them that Welt Machinen were the lawful holder of the mineral license for Kamusalaba rock.
Welt Machinen then sued CRBC claiming Shs 8 billion as profit for two years for utilising Kamusalaba rock yet they did not hold the mining license.
But the High court in Soroti presided over by Justice Henrietta Wolayo ruled in 2014 that Welt Machinen did not have a license over Kamusalaba rock.
The decision kicked off a number of back-and-forth legal battles which continue till today. Welt Machinen filed a civil suit in October last year, seeking to challenge Wolayo’s ruling.
In the meantime, there is an interim order, which stipulates that the status quo should be maintained (in other words CRBC retains control of the rock) until the outstanding legal matters are cleared.

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