Chinese investors of Guanghou Dongsong Energy Group Uganda Limited and Ugandan officials signing the deal over the Sukulu phosphate project as Museveni (L) supervises (PHOTO/File)
The High Court has ordered the directors of Guanghou Dongsong Energy Group Uganda Limited, a phosphate fertilisers manufacturing firm at Osukuru Hills, Tororo District to pay $8 million with interest of 8% per year to the proprietor of Fang Fang Hotel, Fang Min which was frozen in China.
The directors of Guanghou Dongsong Energy Group Co. Limited had frozen the money on bank account in China in an attempt to recover it after they accused Ms Min of failing to satisfactory account for funds used to establish Uganda Hui Neng Mining Limited and acquisition of mineral exploration licenses.
The head of Commercial Court, Justice David Wangutusi ruled that the transfer of the exploration license number 1178 from Uganda Hui Neng Mining Limited to Guanghou Dongsong Energy Group Uganda Limited was done fraudulently obtained.
“Transferring the exploration license from the nominal defendant meant to enable the second defendant (Guanghou Dongsong Energy Group Co. Limited) to acquire the mining lisence with all the profit which profits would be in control of the third defendant (LV Weidong) being the controller of that company, this profit would be at the expense of the nominal defendant (Uganda Hui Neng Mining Limited) and the minority shareholder and at the advantage of second and third defendants,” the judge held.
Guangzhou Dong Song Energy Group (Uganda) Limited was launched in October 2018 to implement the $620 million (more than 2.2trillion) Sukulu Phosphate Comprehensive project to manufacture fertilisers.
Ms Min sued Guangzhou Dong Song Energy Group (Uganda) Limited jointly with Uganda Hui Neng Mining Limited, Mr Weidong, Mao Jie and Yang Junjia over alleged fraudulent and unlawful expropriation of 26Sq Kilometer mineral site.
Ms Min who is also the proprietor of Fang Fang Hotel had sought to recover $25m (94.2b) as compensation for loss of her business interest in terms of general and exemplary damages to cater for her shares in the assets of Uganda Hui Neng Mining Limited which were illegally transferred to Guangzhou Dong Song Energy Group (Uganda) Limited.
She accused Guangzhou Dong Song Energy Group Limited of fraudulent acquisition of a multimillion-dollar minerals deposit at Osukulu Hills in Tororo District.
In the judgement read by Deputy Registrar Festo Nsenga, the court allowed Ms Min to go against the directors of Guangzhou Dong Song Energy Group Co. Limited and Guangzhou Dong Song Energy Group (Uganda) Limited to recover her shares worth $25 million (more than Shs91.8 billion).
“I find that the property has appreciated and continues to appreciate with time. It is therefore fair that court takes the 2018 values as correct valuation. After considering all the circumstances of this case, I find the plaintiff’s 35 shares worth $25 million being midpoint of the fair market value of the mineral deposit,” the court held.
The court also ordered the fertilizer manufacturing firm to be subjected to an audit so as to arrive at its financial status.
Court heard indicate that the resolution that formed a basis for transfer of the shares were made without the knowledge and consent of Ms Min who owned 35 percent shares in the initial company.
According to the complaint, the exploration area is of immense economic value and contains many valuable minerals including large deposits whose value is estimated at $5,223,990,000 but in December 2013, LV Weidong in collusion with Mao Jie and Yang Junjia fraudulently passed a board resolution of Uganda Hui Neng Mining Limited to transfer its exploration license to Guangzhou Dong Song Energy Group Limited.
