World Bank Suspends Chinese Firm Over US$210m Fraud Allegations

The World Bank has suspended a Chinese firm Liaoning-EFACEC Electrical Equipment Company Limited (LEEEC) over fraud allegations involving a US$ 210 million.

The implication is that the firm would be ineligible to participate in Bank-funded projects for 20 months.

The alleged fraud is in connection with the rehabilitation of power rehabilitation projects in Lusaka Zambia.

The projects include a 132kV and 88kV transmission networks and the rehabilitation of the 33kV and 11kV distribution network both in the capital, according to Zambian Time report.

The debarment is part of a settlement agreement under which the company acknowledges responsibility for failing to disclose a conflict of interest and other “sanctionable practices”, and agrees to carry out remedial actions.

The case involves the Lusaka Transmission and Distribution Rehabilitation Project, which was designed to increase the capacity and improve the reliability of the electricity transmission and distribution system in the capital.

Further details show that LEEEC failed to disclose a conflict of interest and misrepresented its past contract experience to meet the requirements of a contract under the project, which is a fraudulent practice.

Continuing, the report revealed that the settlement agreement provides for a reduced period of debarment in light of the company’s cooperation and voluntary remedial actions.

The company commits to developing an integrity compliance programme consistent with the principles set out in the World Bank Group Integrity Compliance Guidelines, as a condition for release from sanction under the terms of the settlement agreement,

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The company also commits to continue to fully cooperate with the World Bank Group Integrity Vice Presidency.

“The debarment of LEEEC qualifies for cross-debarment by other multilateral development banks (MDBs) under the Agreement for Mutual Enforcement of Debarment Decisions that was signed on April 9, 2010”, the report said.