Chinese Fraudulent Business Model In Nigeria Exposed

*How they are Killing the Economy

A fresh strategy in the Chinese weird business model in Nigeria aimed principaly at sabotaging the nation’s economy has been uncovered in Lagos. The latest drive has been described by multiple sources in business and security circles, as a direct assault on the nation’s economy and security.

The latest culprit, Zhe Long, owned by two Chinese: Wang Fuzeng and Chen Yuping, has as its main objective: “to carry on business as manufacturer, buyers, sellers, traders, importers, exporters and merchant exporters.”

The company, according to search at the Corporate Affairs Commission, was incorporated in Nigeria on the 11th January, 2018 with an official address at 4, Eric Moore road, Surulere, Lagos.

Investigation revealed that the perfidy from Zhe Long ranges from false declaration, security breaches, tax evasion, forgery, illegal immigration, concealment and customs duty evasion.

For instance, security agencies have discovered that the commercial that sales invoices of the company is not VAT compliance since there are no VAT number and amount declared on the document. This to tax experts, constitutes a serious breach of the law by Zhe Long and its customers.

Apart from this, investigation also revealed that there are about 30 Chinese semi-skilled/manual workers operating in the company. A source in the company revealed that none of these workers has a formal Combined Expatriate Residence Permit and Aliens Card, CERPAC documentation, which is clear breach of the nation’s immigration law by both company and the illegal immigrants.

The CERPAC GREEN CARD is a bonafide document that allows a non-Nigerian to reside in Nigeria and carry out an approved activity as specified in the permit, or to accompany a resident or citizen of Nigeria as a dependant.

In the areas of import and shipping documentations, sources revealed that Zhe has been falsely declaring a chemical known as Polyol as Polyacetals.Polyols are a group of low-digestible carbohydrates derived from the hydrogenation of their sugar or syrup 

Polyols react with isocyanates to make polyurethanes, which find use to make mattresses, foam insulation for refrigerators and freezers, home and automotive seats, elastomeric shoe soles, fibers (e.g. Spandex), and adhesives.

On the other hand, polyacetal is an engineering thermoplastic used in precision parts requiring high stiffness, low friction, and excellent dimensional stability. It is among plastic materials, with the most crystalline structure. It is also is known for its good fatigue/creep resistance, low friction and good performance in cold temperature.

Sources at the Customs explained that the reason for this false declaration is that Polyacetals global pricing is US$600/metric tonnes as against US$2,000 Polyol.

Similar to the above, the company is also accused of declaring a chemical called TDI as Toluene. Global pricing of Toluene is US$600 as against TDI’s US$2,300

The consequence of this false declaration according to experts, is duty under-payment and the consequent defrauding of the government of necessary duty and VAT on these transactions.

Aside the loss of revenue accruing to the government, there is major security implication for the false declaration of TDI.  Apart from a chemical used in the production of polyurethanes, primarily for flexible foam applications including furniture, bedding and carpet underlay, as well as packaging applications,    TDI is also used in the manufacture of coatings, sealants, adhesives and elastomers.

But due to TDI’s potential explosive properties, the material is a controlled substance that requires an End User Certificate, EUC issued by the office of the National Security Adviser, NSA for its importation to Nigeria.

Sources close to the company alleged that presently there is no evidence to support that Zhe Long has EUC for its TDI’s importation, which according to security experts, constitute a serious national security breach.

In Nigeria, as in much of Africa, Chinese investment provokes suspicion. But according to Mr Ye Shuijin, President, China Chambers of Commerce in Nigeria, the quantum of investment in the Nigerian economy by Chinese companies has hit $20 billion U.S dollars. This I from160 Chinese firms operating in the country which also employed over 200,000 Nigerians

There is also a large population of Chinese people in Nigeria which comprise Chinese expatriates and descendants born in Nigeria with Chinese ancestry. As at 2012, there are approximately 20,000 Chinese in Nigeria.

Like many Nigerians, John Bolton, President Donald Trump’s national security adviser, has accused China of using “bribes, opaque agreements and the strategic use of debt to hold states in Africa captive to Beijing’s wishes and demands”

The Chinese however countered that “Nigeria has the most thieves in the world,” says Thomas Liu, who runs the medicine company, using the sort of uncompromising language that grates from Accra to Kinshasa. “You have to avoid being tricked.”

Chinese businessmen also claimed they have to negotiate past Nigeria’s bureaucratic gatekeepers for permits and licences. “To visit a government official here, you best have around $6,000 to $10,000 with you,” says Mr Ban, a miner. “Otherwise, forget about getting an appointment.”

Leave a Reply

Your email address will not be published. Required fields are marked *