Why Is Botswana Still Waiting For Evidence From Beijing Over Collapsed Glass Joint Venture

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Credit: Mmegi

Botswana’s Public Prosecution department has notified the country’s Public Account committee that it is still awaiting evidence from Beijing regarding an ill-fated multimillion China-Botswana glass project. 

Director of Botswana’s Public Prosecutions (DPP), Stephen Tiroyakgosi, recently told Public Accounts Committee (PAC) that a request for mutual assistance was sent to China in February 2012 regarding the BDC-Fengyue Glass Botswana, Mmegionline reported. Fengyue Glass Manufacturing Company Botswana was a Palapye-based entity incorporated in July 2007 as a joint venture vehicle between Botswana Development Corporation (BDC) and Shanghai Fengue, a Chinese company. 

In the joint venture partnership, BDC’s funding of the project was 75 percent, but it had equity control of only 47 percent, whilst Shanghai Fengyue had 53 percent equity control for its 25 percent contribution. At its inception in 2007, it was envisaged that the project would cost P539 million. Court papers according to Botswana Guardian showed this. 

However, not only was the project unsuccessful, but the processes leading to its eventual collapse were characterized by several public account probes and hearings, auditing, litigation, and even a court liquidation injunction. According to Mmegionline, “in December 2011, Parliament appointed the Special Select Committee of Inquiry into the BDC Fengyue Glass Manufacturing (Botswana) Palapye Glass Project. The committee was set up to investigate allegations of corruption and maladministration at a Palapye-based Botswana Development Corporation (BDC) multimillion-pula glass-manufacturing project. 

 A forensic audit revealed “hundreds of thousands of pula in the bank accounts of key BDC executives and employees that could not be accounted for. It was also found that, “while over 70% of the project capital has been expended, barely half the project works have been delivered and that Fengyue Glass Botswana, a Chinese company that BDC partnered with embellished its profile and had no track-record in any capital intensive project like the Palapye Glass project.”

In 2013, the 410-tonne float plant was provisionally liquidated under an order by the high court in Lobatse. During the court hearing, Botswana Development Corporation (BDC) lawyers who advocated for the liquidation stated that “the company has no sources of income. It is hopelessly insolvent and its liabilities far exceed its assets… also Fengyue Glass Manufacturing Company Botswana has failed to submit PAYE, WHT, and Income Tax returns and has many VAT returns outstanding. It is indebted to the Botswana Unified Revenue Services (BURS)” It is important to note that, Botswana’s government has recently considered revisiting the botched project as part of its economic recovery plans post Covid-19.

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