Chinese company denies bribery charge that led to arrest of Patrick Ho in US

CEFC China Energy calls charges ‘exaggerated’ and are a result of deepening ties between China and Russia

PUBLISHED : Tuesday, 21 November, 2017, 10:44pm
UPDATED : Wednesday, 22 November, 2017, 2:05pm

US authorities have arrested former Hong Kong home affairs minister Patrick Ho Chi-ping and an ex-foreign minister of Senegal for allegedly masterminding a multimillion-dollar bribery scheme in Africa on behalf of a top Chinese energy firm, with some deals supposedly arranged in the halls of the United Nations.

Details about the unidentified company pointed to CEFC China Energy, but the Shanghai-based rising star of China’s energy industry issued a blanket denial on Tuesday.

Ho, who had been working for a subsidiary of CEFC after he left the Hong Kong government, allegedly sent US$2.9 million (HK$22.7 million) worth of bribes to Chad’s president, Uganda’s foreign minister and co-defendant Cheikh Gadio, formerly the top Senegalese envoy.

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Ho, 68, and Gadio, 61, are each charged with violating the Foreign Corrupt Practices Act and money laundering. Ho has been remanded in custody and faces a maximum penalty of 20 years in jail.

United States authorities announced their arrest a day after an oil supply agreement was reached between CEFC and Rosneft, Russia’s state-owned oil company, with two Chinese-language papers citing the Chinese firm’s representatives as suggesting the US-Russia geopolitical contest was behind the arrest.

China Energy Fund Committee, CEFC’s subsidiary NGO of which Ho was secretary general, said in a statement published in Ming Pao newspaper that America’s “exaggerated” acts over “something hypothetical” had shown that “the deepening of Sino-Russian cooperation has touched its sensitive area”.

The state-owned Global Times quoted an anonymous top officer at CEFC as saying there were “deep international political motives” behind the case, adding that Ho’s lawyer had “already denied the groundless accusation”, although Ho’s attorney, Ed Kim, of Krieger Kim & Lewin LLP, declined to comment when contacted by the Post.

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On its official website, CEFC said it was “highly concerned” about the case, but stressed it had no “commercial relations of authorisation” with China Energy Fund Committee, which it fully funded.

“CEFC China Energy has no investment activities whatsoever in Uganda, while its investment project in Chad … does not involve so-called relations of interest with the Chad government,” it added.

The US prosecutors’ complaint filed in New York federal district court did not name the company benefiting from the bribes.

“In an international corruption scheme that spanned the globe, [Ho and Gadio] allegedly conspired to bribe African government officials on behalf of a Chinese energy conglomerate,” acting Manhattan US Attorney Joon Kim said in a statement.

The charges were based on their alleged use of the American banking system to process almost US$2.5 million in payoffs, sent under the guise of donations originating from Hong Kong.

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Under the first scheme, Ho is accused of offering US$2 million in bribes to Chad’s president, who in return allegedly pledged an exclusive opportunity for the company he represented to obtain particular oil rights in Chad without facing international competition.

Ho is also accused of compensating Gadio with a payment of US$400,000.

Under the second scheme, Ho allegedly facilitated a US$500,000 bribe to be paid to an account designated by Uganda’s foreign minister.

He also allegedly provided Uganda’s president and foreign minister with gifts and promises of future benefits – including a share in the profits of a potential joint venture, US authorities said.

These payments and promises were made in exchange for assistance from the foreign minister in obtaining business advantages for the company, including the potential acquisition of a Ugandan bank.

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While the documents did not name the bribe-takers, Chad’s president, Idriss Déby, has served since 1990, and Uganda’s foreign minister Sam Kutesa matches the US court document’s description that he also served as the president of the 69th UN General Assembly.

“We are aware of the reports,” Chinese Foreign Ministry spokesman Lu Kang said regarding the case. “We do not understand the situation now. We always encourage Chinese companies to operate legally.”

CEFC’s role was apparent in the formal complaint. It identified the chairman of the unnamed company as someone who was appointed as a “special honorary adviser” to the president of the UN General Assembly in 2015, when Kutesa held that position.

A Chinese media report at the time showed CEFC China Energy Chairman Ye Jianming together with Kutesa, noting Ye had just been named a “special honorary adviser” to the UN General Assembly.