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Abu Dhabi, UAETuesday 18 December 2018

Chinese oil firm representatives arrested in US on bribery charges

Former Senegalese diplomat and former Hong Kong home secretary alleged to have sent huge bribes to high-level officials in Chad and Uganda

Cheikh Gadio is one of two officials representing a Chinese energy company US authorities arrested. The other is  Chi Ping Patrick Ho. Seyllou
Cheikh Gadio is one of two officials representing a Chinese energy company US authorities arrested. The other is Chi Ping Patrick Ho. Seyllou

US authorities have arrested Hong Kong's former home affairs secretary and the ex-foreign minister of Senegal for leading a multimillion-dollar bribery scheme in Africa on behalf of a top Chinese energy company, with some deals arranged in the halls of the United Nations.

US officials announced on Monday that the former Senegalese top diplomat Cheikh Gadio and Hong Kong's Patrick Chi Ping Ho sent huge bribes to high-level officials in Chad and Uganda to secure business advantages for the Chinese company.

The company was not identified in the announcement or the complaint filed in New York federal district court, but details in the complaint pointed to CEFC China Energy, the Shanghai-based rising star of China's energy industry.

CEFC China Energy has blown on to the scene in just a few years, taking major stakes in global projects, including a 14 per cent chunk of Russia's Rosneft, and playing an important role in the Chinese president Xi Jinping's ambitious One Belt One Road initiative.

The Chinese foreign ministry spokesman Lu Kang said he did not have details about the case.

"I just want to stress that the Chinese government asks its enterprises to abide by local laws and regulations when operating businesses abroad," Mr Lu told a regular news briefing.

In the US justice department complaint, the two men allegedly offered a US$2 million bribe to the president of Chad "to obtain valuable oil rights", and a $500,000 bribe to an account designated by the minister of foreign affairs of Uganda, who had recently completed his term as the president of the UN General Assembly.

"In an international corruption scheme that spanned the globe, Chi Ping Patrick Ho and Cheikh Gadio allegedly conspired to bribe African government officials on behalf of a Chinese energy conglomerate," said the acting Manhattan US attorney Joon Kim.

The charges were based on their use of the US banking system to process almost $1m in pay-offs, sent under the guise of donations.

Ho, who led a Hong Kong-based organisation called the China Energy Fund Committee, also known as CEFC and funded by CEFC China Energy, also 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, authorities said.

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"Their bribes and corrupt acts hurt our economy and undermine confidence in the free marketplace," said the acting assistant attorney general Kenneth Blanco.

Mr Ho, 68, and Mr Gadio, 61, are each charged with violating the Foreign Corrupt Practices Act and money laundering, with possible jail sentences of as much as 20 years. They were arrested over the weekend in New York.

Mr Ho was Hong Kong Home Affairs secretary from 2002 to 2007, and served for several years on the Chinese people's political consultative committee conference.

Mr Gadio was Senegal's foreign minister from 2000 to 2009.

CEFC China Energy'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 the Ugandan foreign minister Sam Kutesa held that position.

A Chinese media report at the time showed CEFC China Energy chairman Ye Jianming together with Mr Kutesa noting Mr Ye had just been named a "special honorary adviser" to the UN general assembly.

Mr Ye was labelled China's "newest oil baron" by Forbes magazine in 2016 after his company made a number of large investments in the Czech Republic.

CEFC China Energy has spread its business through Eastern Europe, Africa, and the Middle East, rising in just a few years to be a major player in world oil markets and raising questions about its backing inside China.

Calls placed to the company went unanswered.