Is Free Zones Board sleeping allowing a Chinese company to scam Ghana?

When questions were first asked about the relationship between the Ghana Free Zones Board and China Hasan International Holding, in relation to the Sekondi Industrial Estate, the focus was on whether the Chinese company, which had been awarded a license to develop the free zone enclave in Sekondi, had the requisite financial capacity to do so (see: IMANI here).

A detailed analysis of its recent activities suggested that China Hasan did not have the capacity to raise the finance for the estimated $4 billion project (Read story on Bloomberg site here), and IMANI's report on the matter made that point quite strongly.

The concerns raised about the company's address in Hong Kong however were merely the frills on a rather tight argument.

After one response from the Ministry of Trade & Industry (MOTI), and further investigation, partly prompted by that response, it has become clear that the company at the center of the recent controversy over the Sekondi Industrial Estate may be intentionally deceiving the government of Ghana. The question is whether the government may be allowing this to happen without sufficient resistance.

The matter has now moved beyond due diligence on financial capacity to potential con artistry. It is now time for the Ministry of Trade & Industry and its agency, the Ghana Free Zones Board, to stop issuing vague rejoinders and immediately take steps to amend the Sekondi Industrial Estate component of the Tranche A1 project summary of the China Development Bank (CDB) master facility.

IMANI issued its on 10th January 2012 ( first report on the Sekondi Free Zone Industrial Estate project). As stated above, we mentioned in this report our discovery that what we had learnt about the Hong Kong address of China Hasan International Holding, given on its website and in other documents we had seen as: 2nd Floor Teng fuh Commercial Building, Queens Road Central, Sheung Wan, Hong Kong, cast significant doubts on the credibility of Hasan International.

The reason was that the 2nd floor of this rather rundown building in downtown Hong Kong (follow the imanighana.org link above for an image of the building) was occupied by a number SME companies plying various trades in such items as jewellery and textiles, but none that seemed capable of building an industrial estate in Ghana to process industrial minerals for export. A search of the tenant list did not yield any name similar to “China Hasan International Holding”.

The MOTI's response came on the 13th of January 2012.

In the said response, the MOTI emphatically stated: “The Ministry of Trade and the GFZB are aware that their [China Hasan International's] offices are located in Beijing.”

What is intriguing is that a few hours before the release of this report, the website of China Hasan mysteriously transformed. The address on the front-page and some inner pages were changed from the one in Hong Kong to a new one, this time in Beijing. Specifically, the new address was given as: Floor 19, Jialong International, No.19 Chaoyang Park Road, Chaoyang District, Beijing 100026. [Luckily several screenshots of the website had been stored by several observers with an interest in the matter].

It is completely within the rights of a company to change its physical location or mailing address (or to “relocate”, as a notice of the website announced) and to update its website to reflect the change.

The difficulty arises when it backdates the change to 1st April 2011, but in the haste places the notice announcing the change in the 2010 news “column” (Read story on Read this).

It is even more worrying when it comes to light that ( a brochure issued as recently as September 2011) by China Hasan as part of a major communications exercise still lists ONLY the dubious Hong Kong address.

Indeed a comparison of google-cached records of the company's website and the current site brings up many odd and dubious contradictions and variations, but time and focus prevent us from discussing them in any detail. Let's focus on one issue at a time.

The address issue does not indeed end with the Beijing – Hong Kong confusion.

Given that we had grave doubts about the veracity of the new changes on Hasan International's website, we decided to subject the new address in Beijing's Chaoyang District to verification as well.

We easily located the address, as follows: no.19 Chaoyang Park Road, Chaoyang District, Beijing 100026.

The challenge was locating the property that China Hasan claims to occupy at the address: Jialong International. The only property on the address given by Hasan International turned out to be a luxury hotel built in traditional courtyard style: the Beijing Jun Wang Fu Hotel.

It is true that some high rise hotels host corporate offices. The challenge with that thesis in this case is that this hotel has about 3 floors. Yet Hasan International claims to be on the 19th floor of the property at this address, so we were led to a logical logjam.

We wondered whether there was another property at 19 Chaoyang Park Road that could explain this bizarre confusion. Modern technology came to the rescue: we requested a low-level, close-up, high-resolution GeoEye aerial photograph. The results were shocking.

There isn't a high-rise building with more than a few floors in the immediate vicinity of no. 19 Chaoyang Park Road in Beijing. The only “Jialong” remotely close to this part of Chaoyang district is a parking lot – the Jialong International Mansion Parking Lot.

As an organisation of private citizens in Ghana, IMANI believes that it has, within its limited means, raised sufficient doubts about the credibility of China Hasan International to warrant an official investigation by the MOTI into the affair, instead of the vague, and somewhat glib, responses their Communications Directorate has issued so far. If such an investigation comes up with evidence that there is nothing to fear, we shall rejoice like all patriotic Ghanaians.

In the end, all we want is for this Sekondi Industrial Estate project, which by the government's own wording is a “flagship initiative of the Better Ghana Agenda”, to succeed. That can only happen if the $100 million being secured from CDB does not go to support a project that is threatened because of its less-than-credible lead project financier.