The majority owner of NEC-Watu Automobile Company, Liu Qingshan has threatened to close the factory and go back to China after a reported harassment from a partner company.
The 62 year old Qingshan accuses the Mbale Industrial park Landlord, Tian Tang, a fellow Chinese, of employing crude methods to evict him and take over his USD 6m vehicle assembly factory.
In an interview, Qingshan accuses Tian Tang boss, Zhang Zhi Gang, of suffocating the investment.
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He says Tian Tang only contributed land as equity in NEC WATU Automobile but did not provide the land title.
“In fact, it is clear to any discerning person that this move is ultimately aimed at taking over our company because there is no evidence proving that the factory belongs to us, and they can expel us at any time,” says Qingshan.
“How can the government of Uganda give free land to Tian Tang to manage investors and the same company sells off land at a whooping USD 40,000 per acre!” a visibly angry Qingshan wondered.
“And then on top of that,” continues Qingshan, “government goes ahead to connect power and road infrastructure and when we complain of unfairness Tian Tang drags us to court! Where is the government?” questions Qingshan.
Qingshan says all stakeholders in NEC (NEC owns 20% of NEC Watu Automobile) and head of State House Investor Protection, Col.Edith Nakalema are aware.
Qingshan thinks Tian Tang’s boss Zhang is too powerful to even be controlled by the government.
“…Actually Zhang ‘controls’ the government! He is given land at USD 245 pe
“Under such difficult conditions, we have already installed 120 units. In the future, if this project is fully completed, it will achieve an annual production capacity of 3,000 to 4,000 vehicles, basically meeting Uganda’s market demand and creating employment opportunities for thousands of people. I want the President to know. If he doesn’t help, I will close and go to Rwanda or Kenya,” he says.
They manufacture FAW(heavy trucks) and JMC (pickups)
Qingshan started his engineering journey at the age of 26 in 1988 in China’s Shandong province and was one of the engineers that manufactured the first Sino truck then.
This may not be good news to President Museveni who has been consistently preaching the industrialization gospel and willing to offer all sorts of incentives in order to attract investors and industries.
QINGSHAN NOT ALONE
As we recently reported, Qingshan may not be the only investor suffering at the hands of Tian Tang in Mbale Industrial Park.
In a joint initiative with the Government of Uganda, Tian Tang secured about 600 acres of land in Mbale on a 49 years lease.
Tian Tang Group reportedly pays the government only 5$ or about sh18500 per year for this lease.
This implies in 49 years, Tian Tang Group will pay 245$ or about sh911,079 to the Government of Uganda.
Ironically, Tian Tang Group, oblivious of the GoU generosity, is now being accused of selling the same land to unsuspecting fellow Chinese investors between USD 40,000 to 200,000 per acre.
It is alleged these shady dealings are ongoing with the knowledge of some officials at Uganda Investment Authority (UIA) and in the GoU as we shall reveal in our subsequent publication.
We are told on top of selling them this land expensively yet Tian Tang acquired it for free; the unsuspecting Chinese investors are also pressured to give up some shares in their respective factories to Tian Tang Group, some officials at UIA and in the government.
To drive this point home, even NEC-Watu Automobile Company owner Liu Qingshan who is now on the verge of losing the USD6M investment allocated 15% shares to Tian Tang before he could do any meaningful business in Uganda. The matter is now in court as we shall reveal in our subsequent publication.
“This is our land, but they are selling it off like it is theirs! I feel like these Chinese [Tian Tang] are selling our country just to make money pretending to be investors. The roads and power facilities in the park were built by the Uganda government on taxpayers’ money, yet under the guise of developing Uganda’s economy, they have acquired vast tracts of land at rock-bottom prices, resell it and continue to demand more funds from our government,” alleges a whistle-blower.
We are also told Tian Tang Group is also allegedly renting out empty warehouses for USD 5 per square meter every month.
“Many of the factories in the Mbale Industrial Park are just empty warehouses for rent. Tian Tang uses the land they got from the government to attract contractors to build these warehouses, and then they rent them out.”
According to the whistleblower, these shady dealings by Tian Tang are the reason why a few products made from Mbale Industrial park are expensive because the investors want to recover the cost of investment.
“An official at one of the Chinese stockings factories told me they could sell stockings for just sh2,000, but because of the rent and land costs from Tian Tang Group, they are forced to sell them for sh4,000. This is making them less competitive in the market.”
The whistleblower further adds that many Chinese operators in the industrial park are struggling, and some have already gone bankrupt and left Uganda.
“So they [Tian Tang Group] are not attracting investors for our country like they said in their propaganda, and our workers are losing their jobs, because the factories are shutting down and the real investors will never get land! It is the selfish landowner who is supported by our corrupt government officials!”
It is alleged that every time the big men from the government come to visit, Tian Tang Group trains Ugandan employees there on what to say and how to smile.
“They force us to only tell good stories, never the truth! I believe in God, Sir, and I can’t keep lying for the Chinese!”
Tian Tang Group has also reportedly blocked all the efforts by the real Chinese investors to meet President Museveni to express the difficulties they face.
“I am very sure that some corrupt officers [in UPDF] are working with Tian Tang because I have heard with my own ears that they charge new real Chinese investors to meet ministers!”
It is further alleged that the Tian Tang bosses have significant power and connections with many officials in the government, from the local level all the way up.
“They [Tian Tang bosses] are in cahoots with corrupt officials, selling off our land for profit. It’s alarming how, during visits, they often wear masks and cover their car number plates, making it nearly impossible to identify them. But I recognize some of these individuals are from the Uganda Investment Authority.”
It has further been alleged that Tian Tang bosses are busy repatriating large sums of money from the industrial park land sales back to their country “through the black market”.
And to keep the industrial park running, they have allegedly also borrowed heavily from Ugandan banks.
“What if the owners escape and never come back, who will return those loans?”
There are whispers that a recent serious fire incident at one of the factories may not have been an accident but rather an act of arson by insiders!
The Mbale Industrial Park encompasses the production of a wide range of goods, including glass, fabrics, household detergents, mobile phones, smart televisions, baby diapers, garments, LED bulbs, tubes, energy meters, and stockings.
Tian Tang Group and UIA did not comment by press time.
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