Chinese arrested in Sh320 million botched machine supply deal

The three Chinese nationals Le Chuan Chen, Le Lei Chen and Qi Zhao Zin at Mwingi Police Station. 

Police in Mwingi are holding three Chinese nationals over allegations of defrauding a fellow investor Sh320 million, in a botched deal to supply Gypsum ceiling boards production line. 

The three are said to have entered into a contract with Ederman Properties Kenya to supply the manufacturing equipment in July 2020 and were paid the whole amount but went into hiding only to resurface more than two years later with a different set of machines.

The agreement between the trio and the company which was witnessed by the Chinese embassy in Nairobi stipulated that the suppliers who run a company by name Teng Fei had to deposit their passports with their clients until the transaction is executed to their satisfaction.

The purpose of surrendering their passports was to enable the management of Ederman properties to apply for their visas and work permits with the Kenyan Immigration department so that they can be allowed to work at the factory while testing the production equipment.

The three Le Chuan Chen, Le Lei Chen and Qi Zhao Zin returned to Kenya last month with equipment that did not meet the specifications outlined in the contract and which failed to fit in the factory set up. 

Ederman Properties has been manufacturing gypsum ceiling boards at Mutwangombe area along the Mwingi – Garissa highway since 2012.

Mwingi sub county police commander Peter Mutuma said the three are in custody awaiting to be arraigned. 

The police boss confirmed the three were arrested on Monday morning in connection with Sh320 million botched transaction for supply of manufacturing equipment to fellow Chinese investors.

The Gypsum production machines were to be sourced from China.

After the disagreement, the suspects first lodged a complaint at Mwingi police station claiming that they were being unlawfully detained at the Ederman factory by their fellow countrymen, prompting detectives to summon the investors for questioning.

According to witness statement by Zeyun Yang, the Managing Director of Ederman Properties seen by Nation, the three suspects gave false information to both Mwingi police and the Chinese embassy in Nairobi in their desperate efforts to escape liability.

Mr Mutuma said the suspects will be arraigned to face charges of obtaining money by false pretenses and conspiracy to defraud, on Wednesday once a Chinese interpreter is available.