Congo Hold-Up: Congo Construction Company, the scandal of the century

Congo Hold-Up, a survey of 19 media and five NGOs.

© RFI

Text by: Sonia Rolley Follow

27 mins

As the Forum on Sino-African Cooperation is held in Dakar, Senegal, the leak of millions of banking documents and transactions at the BGFI reveals the secret history of what has been called in the Democratic Republic of the Congo, the “contract”. of the century ”: an agreement signed between China and the DRC which was to allow the largest Chinese companies to exploit an important deposit in this central African country against infrastructure.

The Congo Hold-up investigation reveals the names of the intermediaries and the millions of dollars paid.

The Sentry and Bloomberg survey, with Mediapart, PPLAAF and the European network EIC.

Advertising

Read more

The account was finally emptied.

The head of internal audit of the BGFI group in Libreville, Yvon Douhore, cannot believe his eyes.

On July 5, 2018, a Chinese businessman has just left the headquarters of his subsidiary in Kinshasa, capital of

the Democratic Republic of Congo (DRC)

with 13,624 hundred dollar bills, 10,001 fifty and 43,000 small bills. American banknotes, despite explicit instructions prohibiting such withdrawals.

Total amount taken in large and small denominations: Over $ 2.5 million.

"

I miss the words,

" replies one of her colleagues the next day.

The withdrawal slip.

© PPLAAF / Mediapart

The businessman in question is called "David" Du Wei and his company, Congo Construction Company (CCC). A month earlier, Yvon Douhore had demanded from the management of

BGFIBank RDC a

whole series of documents to authorize operations on the accounts of this strange company. For lack of adequate explanations, it was under his supervision that the accounts were blocked on June 19, 2018 by the compliance department of the Congolese subsidiary.

Colleagues in Douhore blocked accounts while the head of internal audit investigated embezzlement committed during Francis Selemani Mtwale's tenure as head of BGFI DRC. President Kabila's adopted brother has just left the bank, leaving behind a series of scandals. But although no longer in post, someone at BGFI in Kinshasa continues to authorize transactions on behalf of CCC, until the last cash withdrawal of $ 2.5 million in July 2018.

The millions bank documents and transactions

obtained by the Platform for the Protection of Whistleblowers (PPLAAF) and the French news site Mediapart suggest why: Douhore helplessly witnessed the final act of the secret role of CCC as an intermediary between mining groups Chinese and the Kabila clan.

Congo Construction Company has construction in name only.

This company and its founder, Du Wei, seem rather to have played a facilitating role in the negotiations around the execution of what has been called the “contract of the century” under the regime of Joseph Kabila (2001-2019). .

Since 2008, the DRC and China have signed an agreement for loans amounting to $ 6.2 billion.

This historic agreement was billed as a "

win-win

" exchange.

»Congolese minerals against the construction by Chinese companies of infrastructure, mainly roads, in the DRC. A joint venture was created under this agreement: Sino-Congolaise des mines (Sicomines). Gécamines, the Congolese state mining company and the two Chinese public behemoths, China Railway Group Ltd (CRCG) and Power Construction Corporation of China (Powerchina), via its foreign subsidiary Sinohydro, become shareholders.

This contract of the century will turn into the fiasco of the century: 13 years later, in September 2021, under the terms of a first audit of this Sino-Congolese agreement, the Extractive Industries Transparency Initiative (EITI) concluded in its report preliminary that some of the terms of this contract constituted "

a prejudice without precedent in the history of the Congo

".

The EITI points to the inadequacies of a feasibility study for the mineral deposits exploited by Chinese companies, the signing of a rider on the distribution of profits that even the Ministry of Mines was unaware of, and delays in the construction of infrastructure.

► To read also: 

DRC: a damning report on Sicomines on the government table

The Congo Hold-up survey

today reveals the role of CCC in the execution of this contract.

It also reveals that approximately $ 65 million passed through CCC accounts between January 2013 and July 2018, of which $ 41 million was withdrawn in cash. 

At key moments of blockages in the implementation of this project, we can see that at least 30 million dollars will be paid through this shell company to the inner circle of former President Joseph Kabila.

Part of these funds will pass through the account of the Sino-Congolese Program Coordination and Monitoring Office (BCPSC), still headed today by Moïse Ekanga, a close friend of the former head of state. 

For The Sentry, anti-corruption NGO and partner of the Congo Hold-up investigation, this investigation “

offers a rare and disturbing glimpse of a system of grand corruption and state capture, as well as of the international financial system on which it rests

”.

Contacted, the former head of state Joseph Kabila and his family members did not respond.

The leaders of the Sicominesno more.

Ingredient # 1: Choose well-established intermediaries

CCC boss Du Wei was born in 1979 in Liaoning, industrial northeast China.

He started working in Africa in the early 2000s, and in August 2016 he wrote an article for the Institute of International Studies at Wuhan University lamenting the tendency of Chinese companies to use "

unscrupulous means.

To win big projects.

In the Congo, he calls himself David.

He worked for Sicomines for three years until 2012, when he became a consultant for BCPSC, according to his LinkedIn profile.

It was also that year that he formed Congo Construction Company with Guy Loando, a then 29-year-old Congolese lawyer, who is now Minister of Regional Planning under new President Félix Tshisekedi. 

Guy Loando is no stranger to Chinese business circles in the Democratic Republic of the Congo.

His “mentor” and business partner, as he

himself

claims

on his foundation's website

, is none other than “Simon” Cong Maohuai, boss of the Hotel Fleuve Congo (which serves as headquarters for CCC ) and the Congo Toll Management Company (SOPECO) which manages the hefty tolls of the former Katanga and Kongo Central.

"Monsieur Simon" is also Du Wei's friend.

Screenshot of the site of the Guy Loando foundation.

©

For ten years, “David” and “Simon” will be the main Chinese intermediaries between Chinese companies and Congolese officials.

A document obtained by our partner The Sentry shows that Guy Loando owns 20% of the shares of Congo Construction Company until July 25, 2017. But he is not, at first glance, among the main beneficiaries: Over this same period, he received from this company only about $ 22,000 in direct payments out of the $ 65 million that passed through the accounts of this company. 

When contacted, the minister explained: “

At the time, I was hired as a private lawyer for the purpose of setting up the company.

His office would have "

often served as a second shareholder

", for companies with only one, when it was necessary to comply with the law. Guy Loando assures in any case "

not to have played any role in the daily management of the company CCC"

, not to have been "

kept informed of its commercial activities

" and not to be either member of its board of directors. He also specifies that he has "

no knowledge of Mr. Du Wei's business relations in the DRC, China or elsewhere

", or even "

CCC's banking operations or any other transaction with third parties in the DRC or abroad

”.

At the very time of the creation of CCC, in 2012, the Sino-Congolese Convention was in trouble.

Congolese deputies dragged out the process of establishing tax exemptions for Sicomines, while the 2007 and 2008 agreements provided for them in black and white, officially to guarantee the long-term viability of the project.

These delays lead the China Exim Bank, the main financial partner of the project, to suspend its disbursements in 2012, after having already loaned one billion dollars to Sicomines.

The affair could be disastrous for Crec and Sinohydro which find themselves without external financing.

That's when Du Wei kicks in. He opened an account in December 2012 for CCC at the BGFI. Before even a single deposit is made, millions of dollars are withdrawn in cash. 

Between February and July 2013, this company, which had no known construction plans, received $ 18 million from bank accounts in China and Hong Kong held by four offshore companies registered in the British Virgin Islands, one of the world's most important havens. most opaque tax systems in the world.

Several of his seemingly unrelated companies make their transfers on the same day, February 11 and July 9, the start and end dates in this big money transfer transaction, as if these payments were coordinated.

In the Congo Hold-up documents, these transfers are denominated as "

payment of construction costs

", "

other transfers

" and "

other

".

The Kasumbalesa toll station, in the DRC.

© RFI / Sonia Rolley

The last payment which funds this account of CCC, we owe it on June 26, 2013 to the Road Management Company in Congo (SGR-Congo).

We sought to find out who was behind this company which operates on the Lubumbashi-Kasumbalesa section, one of the most lucrative in the Congo, because it is the main exit route between the rich Katangese area and neighboring Zambia. According to documents obtained by our partner, The Sentry, SGR-Congo had two Chinese shareholders: China Railway Group (Crec, 45%), which is also a shareholder in the Sicomines project, and its subsidiary China Railway Engineering Consultant Group (CEC, 15% ). The third shareholder, a minority with 40% of the shares, is called Strategic Projects and Investments (SPI). The latter company is represented by the head of the Sino-Congolese Program Coordination Office, Moïse Ekanga. 

The statutes of SPI published in the columns of the official journal published on August 15, 2006 tell us who effectively controls the company: The brother of the former head of state, Zoé Kabila and another member of the family unknown to the general public, are the main shareholders with 70% and 10% of the shares respectively.

The third shareholder has since died.

It was the gray eminence of Joseph Kabila, Augustin Katumba Mwanke.

Extract from the official journal of August 15, 2006. © The Sentry

In 2015, according to documents obtained by The Sentry, SPI became the sole beneficiary of this toll, after the withdrawal of Chinese shareholders. 

Between June 2013 and January 2016, this company made 41 transfers, worth $ 7.8 million, to CCC, almost all of which were withdrawn in cash.

The General Inspectorate of Finance (IGF) looked at road tolls.

According to this controlling institution, between 2010 and 2020, more than 700 million dollars were embezzled by its companies SOPECO and SGR-Congo and the main responsible would be Cong Maohuai.

The IGF says it has found no document linking SGR to the family of the former president.

Contacted, "Mr. Simon" Cong Maohuai assures that since 2016, SGR-Congo belongs to him, without providing proof to the Congo Hold-up investigation.

He denies any misappropriation.

Zoe Kabila did not follow up.

Ingredient # 2: Find a respectable bond

The first big operation of Congo Construction Company was made under cover of the summit of the Francophonie which is held in Kinshasa from October 12 to 14, 2012. After the criticisms related to his re-election in 2011, Joseph Kabila decides to receive in great pomp. 

Behind the scenes, his adopted brother and general manager of BGFIBank DRC, Francis Selemani Mtwale, recommends that a loan be granted to the organizing committee set up for the occasion.

65 million dollars are requested by the credit committee on June 6, 2012. The file which it establishes specifies "

the repayment will be ensured by the retrocession of the receipts coming from the contract of the Sino-Congolese program signed between the Chinese and Congolese States, managed by the Sino-Congolese Program Coordination and Monitoring Office

”. 

Discussions around the loan are subject to a confidentiality agreement between the bank and the Congolese state. It was signed on June 14, 2012 by Francis Selemani Mtwale, on behalf of BGFIBank DRC, and the Minister Delegate to the Prime Minister in charge of Finance, Patrice Kitebi. The parties agree that day "

that all the information received during the discussions and conclusions of the deed of credit opening referenced n ° BGFIRDC / DEAJF / MBVE / 001/06/2012 are confidential and cannot be disclosed by one party without the consent of the other

”.

Two days later, the boss of BGFI DRC justified this in an e-mail sent to the headquarters in Libreville: “

The State, insisting on the highly confidential nature of the said documents because of its ongoing program with the Bank World and the IMF, demanded the signing of a confidentiality agreement

”.

At the time, the DRC was well under the program of the International Monetary Fund.

But neither the IMF nor the World Bank cared about domestic debt back then.

The explanation therefore seems unconvincing.

Contacted, the former minister Patrice Kitebi did not respond.

Why keep it a secret? Perhaps because the organizing committee of this summit itself did not know that this loan was taken. In any case, this is the version of the Congolese historian Isidore Ndaywel, commissioner general of the organizing committee. “

I was not informed that the government had taken out a loan from BGFIBank,

” he explains, “

however, we had been asked to open our accounts exclusively at this bank.

"

Finally the loan granted is not 65 million, but 40 and it does not land on the account of the organizing committee, nor even on the account of the Ministry of Finance.

The 40 million dollars are paid on September 25 into an internal account at BGFI entitled “BGFI Gabon USD Loan” and they will be transformed into three loans granted by BGFIBank DRC.

The first two, for a total amount of $ 26 million, are granted to the Ministry of Finance, which transfers only $ 10 million to the account of the organizing committee of the Francophonie summit.

On the eve of the summit, the remaining $ 14 million is sleeping in an account at the BGFI.

A month later, on November 13, 2012, instead of repaying this overpayment which the Congolese government ultimately did not use at the parent company, BGFIBank RDC transfers this amount in the form of a loan to the account. the Sino-Congolese Program Coordination and Monitoring Office (BCPSC).

This account was opened for the occasion, four days earlier, by Moïse Ekanga.

It is Francis Selemani himself who oversees this entire operation. 

Ingredient # 3: identify the right beneficiaries

Did the Francophonie summit serve as an excuse for Francis Selemani, adoptive brother of Joseph Kabila, to make funds available to the coordination office headed by Moïse Ekanga, himself close to the former head of the 'State ?

When questioned, neither the BGFI group, nor Francis Selemani and Moïse Ekanga answered our questions, despite our multiple reminders. 

However, we will see that of the $ 14 million granted to the BCPSC, $ 7 million will be used to repay an informal loan granted to a company over which Joseph Kabila is in the process of taking control.

This company is well known, it is Grands Elevages du Bas-Congo (GEL) which still belongs for a few months to businessmen Alain Wan and Marc Piedboeuf, partners of the former president.

On September 25, 2012, when the Ministry of Finance obtained its first loan of $ 24 million for the organization of the Francophonie summit, the BGFIBank RDC granted a "

credit advance

", according to its wording, of a little more. of $ 7 million to GEL. This operation appears to be an error and the transfer is presented to the GEL account as returned to the bank. 

But this money will indeed benefit GEL.

Instead of being returned to the BGFI, it is sent under false denomination to a Swiss account of HMIE, an offshore company registered in the British Virgin Islands, for a "

purchase of farm equipment

".

HMIE is owned by Belgian businessman Philippe de Moerloose, also very close to Joseph Kabila.

When questioned, he confirmed to us that it was indeed a sale of agricultural equipment.

In the end, the BGFI will get the reimbursement of these $ 7 million.

A transfer of the same amount is made by the BCPSC of Moïse Ekanga.

The transaction is almost literally

denominated

REGUL CREDIT MIN FINANCES

”.

Moïse Ekanga's office does not stop at paying off GEL's debt to BGFI.

Of the 14 million, the BCPSC transfers the remaining 6 million dollars to MW Afritec, the construction company which also belongs to the Wan-Piedboeuf duo.

MW Afritec then transferred the money in multiple directions.

It transfers 2.2 million to its other accounts, an additional 2.5 million to an account in Belgium held by an apparent subsidiary of MW Afritec which the Congo Hold-up consortium has found does not exist in this country. .

► To read also: Congo Hold-up: in the footsteps of Port de Fisher, the mysterious company of Joseph Kabila

For the rest, half a million is withdrawn in cash and half a million is transferred to Carrières du Congo, a mining company in the same Wan-Piedbœuf network. 

When contacted, Marc Piedboeuf and Alain Wan refused to answer most of our questions, judging our information "

for the most part false

" and our approach motivated by the "

manifest intention to harm

".

On November 3, even before the publication of this article, they filed a complaint in Kinshasa for "

slanderous denunciation

" against our partners Mediapart and

De Standaard

.

This is how the 13 of the 14 million loaned to the BCPSC are spent thanks to the money officially earmarked for the Francophonie summit.

The Congo Hold-Up investigation was unable to establish the destination of the last million. 

But this money will have to be repaid. And it is Congo Construction Company that will take care of it. Since February 2013, CCC's account has been fed by four offshore companies, created by a domiciliation firm already used in the past by the Chinese group CREC and whose accounts are based in China and Hong Kong. $ 18 million is paid in 5 months. This is more than enough to cover the loan for Moïse Ekanga's office. Almost 14 million will be withdrawn in cash. These funds are then transferred to the BCPSC account and allow it to repay its loan to the BGFI.

This maneuver is hardly hidden.

On February 12, 2013, precisely $ 4.26 million was withdrawn from CCC's account, officially in the form of a cash withdrawal.

They reappear on the same day in the BCPSC account in the form of a cash deposit. 

No case of banknotes is circulating.

The bank takes care of everything.

That day, Moustapha Massudi, commercial and marketing director of BGFIBank in DRC, sends an email to Freddy Olela, customer relations manager, asking him to withdraw this exact amount from CCC's account and credit it to the BCPSC.

He copied Francis Selemani and Moreau Kaghoma, his operations manager: "

As discussed, please proceed with the following transactions

".

Illustration of the email sent by Mr. Massudi.

© PPLAAF / Mediapart

Contacted, Moreau Kaghoma referred to BGFIBank.

Freddy Olela did not respond.

Moustapha Massudi says he does not remember this email, nor the transaction mentioned. 

Where does the money received by CCC come from and who is behind the four offshore companies?

We asked China Railway and the other Chinese shareholders of Sicomines if they had paid any funds to CCC or if they owned companies based in the British Virgin Islands, they did not respond.  

Ingredient # 4: Set clear goals

Was Congo Construction Company used to pay bribes to Joseph Kabila's inner circle? One operation in particular suggests so. Between June and September 2016, at a key moment in its history, Sicomines made three major payments to CCC for a total amount of $ 25 million. Du Wei will distribute most of this money to businesses and individuals linked to the former president's family.

A year ago, the Sino-Congolese joint venture started to produce.

But in 2016, it was forced to reduce its objectives due to insufficient electricity supply on the site.

The problem has been known for a long time and the solution is mentioned in the first phases of discussions between China and the DRC: it is to build a hydroelectric dam in Busanga.

But decisions are slow to be taken.

We will see that just a few days after an agreement has been reached on the financing of the dam, Sicomines makes a first transfer to the CCC account of approximately $ 8 million.

Citibank in New York is processing this transaction.

Its wording mentions "contract costs", even though there was no contract between these two companies. 

That day, CCC transferred around $ 7.5 million to Sud Oil, a company owned by Joseph Kabila's sister and sister-in-law, and the remaining half a million dollars in accounts in Du Wei's name. in Hong Kong and New York.

A transfer request of approximately $ 7.5 million to Sud Oil.

© PPLAAF / Mediapart

► To read also: Congo Hold-up: Sud Oil, the siphonneuse of the first circle of Joseph Kabila

On August 29, 2016, a few days before Chinese and Congolese stakeholders signed the final contract for the Busanga hydropower plant, CCC received an additional $ 9 million from Sicomines, presented as a simple “

payment

”.

Here again, Citibank lets the transaction go through and intermediary Du Wei takes his share, just under $ 1 million. 

Asked about these failures, the American bank explains "

taking great care to ensure due diligence through internal controls

" and "

constantly working to manage and monitor

" its operations "in

order to comply with applicable laws and regulations

".

Of these 9 million, 7 are paid this time to the account of the Zhengwei Technical Cooperation Company (SZTC), which had ensured the renovation of Kingakati, the private residence of Joseph Kabila.

SZTC also received $ 5 million from Sud Oil via Kwanza Capital, and at the time financed the construction of a commercial complex in Lubumbashi, Hypnose, whose ownership is attributed by the people of Lush to the former head of the State.

This complex shares the same address with SPI, the company founded by his brother, Zoé Kabila: 826 avenue Mama Yemo in Lubumbashi.

Joseph Kabila and Moïse Ekanga were present at its inauguration.

When contacted, SZTC said that it did not know Mr. "Du Wei", his activities and did not have any commercial relations with him.

View of the entrance to the Hypnosis building, in the DRC.

© RFI / Sonia Rolley

Through an account at the Bank of China, Sicomines transferred an additional $ 8 million to CCC in September 2016.

Du Wei takes his commission and transfers about $ 2.6 million through various channels to the accounts of All Oceans Logistics (AOL), a company registered in the Faroe Islands, an archipelago located between Great Britain and Iceland, a true paradise. tax for shipowners.

AOL owns at least one boat from the Egal fleet, a company also controlled by relatives of Joseph Kabila: the refrigerated ship El Nino which will the following year transport wild animals to Nsele, Joseph Kabila's animal park.

Contacted, its leaders did not respond to our questions.

► To read also: Congo Hold-up: Equal, the autopsy of a scandal

Another transfer also attracts attention.

A mysterious company, Congo Management (Coman), receives nearly half a million dollars from CCC.

It is unknown to the general public in the DRC, but it is the main Congolese partner of Chinese companies in the construction of the Busanga hydroelectric dam with 15% of the shares.

Coman has more shares in this project than the National Electricity Company and no one knows the shareholders.

On the other hand, we know one of its representatives: Me Norbert Nkulu, the personal lawyer of Joseph Kabila that the former head of state placed at the Constitutional Court.

We also know its manager, Claudine Paony, assistant to Moïse Ekanga.

Nous nous sommes rendus au siège de Coman à Lubumbashi. Il s’agit d’une résidence privée qui sert uniquement de boîte aux lettres. Son propriétaire assure qu’il est le fondateur de Coman, mais l’avoir revendu depuis longtemps. Il refuse d’en dire plus. Contactés, Me Norbert Nkulu et Claudine Paony n’ont pas donné suite.

Ingrédient #5 : Savoir quand partir

À la fin de son existence, CCC est encore au cœur d’une transaction impliquant un grand groupe chinois : le rachat d’un gisement de phosphate dans la province du Kongo Central par le géant minier China Molybdenum Co.

Du Wei commence à restructurer sa société en juillet 2017 et en devient l’unique actionnaire. Il transfère toutes les actions de CCC à une société enregistrée dans les îles Vierges britanniques appelée Harefield Overseas Ltd.

Du Wei reprend aussi un permis d'exploitation de phosphate appartenant à Allamanda Trading Ltd, une société liée à la famille Kabila. Son représentant n’est autre qu’Alain Wan, associé de l’ancien chef de l’État. Le permis d'exploitation de phosphate d'Allamanda Trading borde les terres agricoles de GEL, la société appartenant à Joseph Kabila et à ses enfants. Allamanda Trading est aussi actionnaire de plusieurs entreprises avec GEL : Port de Fisher et une société minière appelée Carrières du Congo. 

The phosphate deposit is located under the village of Kanzi, between Boma and Muanda, in Kongo Central province.

For 20 years, its inhabitants have seen companies pass, engineers in charge of prospecting.

They were promised that one day they would benefit from this exploitation, but so far they have not seen anything.

Around them, GEL farms have grown and their cows are walking around everywhere.

Despite our insistent requests, none of the parties involved in this transaction answered our questions. 

A directional sign indicates the company of large livestock (GEL), in the DRC.

© RFI / Sonia Rolley

En janvier 2018, le géant minier chinois China Molybdenum Co. achète CCC et sa licence de phosphate pour 40 millions de dollars et obtient ce transfert de permis en trois jours. China Moly a fraîchement débarqué au Congo en prenant le contrôle de la mine de cuivre-cobalt de Tenke Fungurume (TFM) dans le cadre de transactions de plus de 3 milliards de dollars. En 2020, la société chinoise a aussi payé 550 millions de dollars pour prendre le contrôle d'un autre grand gisement congolais, le projet cuivre-cobalt de Kisanfu.

Ce rachat intervient alors qu’un nouveau code minier est en voie d’être adopté en RDC. L’État congolais en avait profité pour renégocier les plus gros contrats miniers de l’ex-province du Katanga jugés défavorables. Alors que plusieurs entreprises acceptent de modifier leur contrat, la convention directement signée avec TFM est restée inchangée.

Contacted about the bottom line of this transaction, China Moly explains that Du Wei would have learned of his interest in the phosphate deposit in 2017. She also assures that he was the sole shareholder of Harefield Overseas Ltd, the offshore vehicle which owned CCC at the time of the transaction.

As to whether China Moly will ever mine the huge field in Kanzi village, the Chinese company says it will develop the project "

at an appropriate time in the future

."

Du Wei did not answer our questions.

According to our information, he has definitely left the Democratic Republic of the Congo.

Newsletter

Receive all international news directly in your mailbox

I subscribe

Follow all the international news by downloading the RFI application

google-play-badge_FR

  • DRC

  • China

  • Congo Hold-up

Keywords: