Hong Kong firm’s cannabis promise to Cameroon casts spotlight on corporate laws
When
Gilbert Mvondo was hired to cut roads through pristine Cameroonian rainforest
in 2015, he did so expecting to be paid.
He had been
recruited, along with a number of other residents of Meyomessala – birthplace
of Cameroon’s President Paul Biya – to prepare the ground for representatives
of the prime minister’s office and the Trade Park Corporation, a little-known
but well-connected firm with a registered address in Hong Kong’s Wan Chai
district.
The Hong
Kong company had promised to create jobs through the cultivation of cannabis
and other crops for export, and was eyeing an area of land roughly the size of
Kowloon for what its promotional materials said would be a “modern,
technology-driven agriculture export free zone” called Meyo AgriPark.
But today,
the rainforest has started to reclaim the roads that Mvondo and his countrymen
helped dig, with neither the hemp plantation nor the promised jobs having
materialised. Local shave returned to the farms they say they were told to
vacate to make way for the project – and both Mvondo and his fellow road
builders are still waiting to be paid.
According
to interviews and internal documents seen as part of a joint investigation by
the South China Morning Post , NBC News and the Organised Crime and Corruption
Reporting Project, hundreds of thousands of US dollars appear to have been
spent on Trade Park’s project in Meyomessala, yet questions remain about where
the money actually went.
In an email
to reporters, Meyomessala Mayor Christian Mebiame Mfou’ou said “unfortunately”
his town had not received “anything” from the project – this despite an
investor from Equatorial Guinea insisting that he had wired more than
US$300,000 to the local official’s personal account.
Trade Park
Corporation’s communications with Cameroonian officials and foreign investors,
and its business plans to produce medicinal oil extracts from cannabis in order
to “establish Cameroon as a destination for the agricultural pharmaceutical
industry” have been unearthed in a cache of documents obtained by Distributed
Denial of Secrets, a US-based collective of transparency activists that posts
leaked documents online.
The latest
documents, dubbed the #29Leaks, have been shared with nearly two dozen media
outlets across 18 countries – including NBC and McClatchy in the United States;
CBC in Canada; The Times in Britain; Süddeutsche Zeitung in Germany; and the
OCCRP, the international consortium of investigative journalists that reported
on the Panama Papers leak – ahead of their planned public release later this
month.
The
#29Leaks detail the activities of London-based Formations House, a family-run
company services firm of which Trade Park Corporation is just one of many
subsidiaries.
Trade Park
CEO Charlotte Pawar, the daughter of Formations House founder Nadeem Khan, said
in an emailed statement to journalists that the leaked data had been reported
as stolen, and that Trade Park Corporation had faced extortion attempts.
“The stolen
data cannot be verified and should not be relied upon,” she said.
Since
Formations House was founded in London in 2001 by Khan – who died in 2015 weeks
before he was set to face trial on charges of money laundering – it claims to
have incorporated more than 400,000 companies.
The
business plans of Formations House’ Trade Park Corporation arm show that the
Hong Kong-registered firm was pushing for what it termed “ethical
deforestation” of protected rainforest in Cameroon, as well as the “ethical
rehoming of wildlife”, which would have likely included endangered species such
as western lowland gorillas, chimpanzees and leopards.
Pawar,
Trade Park’s CEO, had also pushed for similar projects in about a dozen other
African countries.
While they
varied in detail, all the proposals included the creation of opaque economic
zones, which would offer “total anonymity” and “no visibility to US or
international institutions”, according to marketing documents.
In some
countries – including Chad, Malawi and Cabo (Cape) Verde – Trade Park
Corporation piqued the interest of governments with its promises of grandiose
benefits. There is no indication from the documents or publicly available
information that the company’s plans in any of these countries – or those it
had in Madagascar, Angola, Mozambique, São Tomé and Principe, Equatorial Guinea
and Comoros – came to fruition, with only its project in Cameroon appearing
close to becoming operational.
Trade Park
Corporation’s nominal presence in Hong Kong, which has a reputation for ease of
doing business owing to light regulation and low taxes, also raises questions
about standards of due diligence in the international finance hub.
Nearly
one-third of the companies managed by Mossack Fonseca, the law firm at the
centre of the Panama Papers leak in 2016, were incorporated in Hong Kong or
mainland China.
NOVA
Business Services, which provided a virtual office for Trade Park Corporation,
said the company ceased to use its services in 2017.
“NOVA
upholds the principles of preventing money laundering, terrorist financing and
any illegal conduct,” said NOVA’s director Klaus Lau.
“If we
discover any of our clients are involved in the above in any way, we will
terminate our services immediately,” said Lau.
In
Cameroon, Trade Park sold Meyo AgriPark as a “world class export zone” that
would provide “the optimal environment” for foreign investors eager to
capitalise on the global “agro-pharmaceutical” industry that the company claimed
to be worth some US$500 billion.
It promised
to create 15,000 jobs within three years and bring in US$300 million of foreign
direct investment from companies lured by the zone’s special permission –
through an “exclusive and perpetual government approved licence” – to cultivate
cannabis, which is otherwise illegal in Cameroon.
According
to one contract, this licence was obtained with support from Meyomessala Rural
Council in collaboration with the Institute of Medical Research and Medicinal
Plants Studies, based in Cameroon’s capital of Yaounde. Mebiame Mfou’ou, the
mayor of Meyomessala, did not respond to questions about the licence.
Another
contract details promises made by Trade Park to build an employee health care
centre and an academic institute, plus improve local infrastructure – all of
which would have been welcome news for local impoverished communities.
“They told
us we were going to make a lot of profit if we started farming medicinal plants
to sell to the white man. But the council has gone cold on it,” said one
resident, who did not wish to be named, referring to the Meyomessala local
government. “We don’t know what to think.”
The
project, located on land less than 10km from the Cameroonian president’s
private compound, would have seemed like a great deal for the government as it
required no direct funding from the state, only international investment.
The documents
show that to raise the US$50 million she said she needed, Pawar courted foreign
investors with deep pockets.
In a
“projects update” email to associates in December 2016, she claimed that global
accounting firm PwC had “informally agreed” to invest, subject to Trade Park
Corporation being able to raise €30 million (US$33.2 million), while French
investment bank Société Général and pan-African conglomerate Ecobank had
together offered to “extend a line of credit” of €15 million.
There is no
evidence to show her claims materialised but the leaked documents show hundreds
of thousands of dollars did flow into the project from elsewhere.
A Kuwaiti
businessman bought about US$250,000 worth of shares in Trade Park Corporation
in December 2015, but soon soured on the project. In a letter demanding a
refund, his lawyers claimed he had been misled by the promise of “astoundingly
spectacular” returns of US$4.3 million, and called the content of a promotional
brochure “nothing less than science fiction”.
In response
to questions, Pawar said the businessman’s “decision to invest was based on his
verification of the project and its licences”.
Another
businessman from Equatorial Guinea said he transferred 200 million Central
African francs (US$336,000) to the personal bank account of Meyomessala Mayor
Mebiame Mfou’ou to buy the land designated for Meyo AgriPark. George Kaiafas
said he sent the money on the understanding it would be distributed to the local
community – but was still awaiting documentation to prove his ownership.
He
initially said he would provide transaction records, but then stopped
responding to questions. One 2017 email indicates Kaiafas paid about US$65,000
as an initial investment in the project.
Meanwhile,
HSBC bank statements show that between December 2015 and March 2016 Pawar
transferred a total of €55,000 (US$60,600), in two separate payments, to a
company operated by Jacques Roger Dougueli, Trade Park Cameroon’s general
manager, who did not respond to requests for comment.
A month
after receiving the second payment, Dougueli explained in an email to Pawar
that he needed to pay nearly US$10,000 to a private company to obtain an
operating licence for Meyo AgriPark from Cameroon’s National Office for
Industrial Free Zones (NOIFZ), which he said had rejected their proposal,
citing a “bad market study” and “weak business plan”. To resolve those issues,
the government body recommended asking “their private consulting firm” to
“edit” the proposal – for a fee that Dougueli had to negotiate.
Later in
2016 Pawar’s business partner Frederic Bard told her that he had to send the
mayor and company “100k” to keep them patient, adding: “I need to feed the
beast …”
Pawar
responded saying it wouldn’t be the first such payment. “We paid them money
initially, and that was tough for us but we did it, and then they asked for
more and then said they had already spent it and needed it replacing,” she
wrote.
In an email
to colleagues the following January, Pawar estimated that her side had
“already” spent €500,000 (US$551,000) on the project.
Towards the
end of the year, all parties were growing increasingly exasperated with the
lack of progress.
In
September 2016, Meyomessala Mayor Mebiame Mfou’ou, who the documents show stood
to make 10 per cent of licence fees from the park, contacted Dougueli to
lambast Trade Park Corporation’s handling of the project.
“I am
frustrated over your inability to honour your commitments,” he wrote,
complaining he had expended political capital and lobbied the “head of state,
first lady, other senior government officials” and members of the local
community. “I am worried for my political career and my freedom.”
He did not
respond to questions about whether he or the local government received any
money from the project. Adolphe Nkoumou, who is in charge of local agricultural
projects, told reporters that as far as he knew nobody in the local government
had received anything.
And Jean
Paul Nkomo Nkomo, chief of Tatching 2 village in Meyomessala region, scoffed at
rumours that 85 million Central African francs (US$142,800) had been received
by local authorities, saying that if he had “that sort of money” he would be
living “at the Hilton” hotel and not in an unfinished shack.
The
documents show Trade Park Corporation touted the promise of a big pay-off from
cannabidiol (CBD) oil exports – which in one instance it described as “pound
for pound … currently more valuable than gold” – to help smooth the way for the
firm to get permission to grow cannabis in Cameroon and acquire a massive tract
of protected rainforest to do so.
Chris
Duvall, who chairs the University of New Mexico’s geography and environmental
studies department, said the Meyo AgriPark proposal is part of a growing trend
of foreign companies looking to Africa for land where they can grow cannabis to
cash in on the burgeoning global market for medicinal extracts.
“There are
really very limited environmental regulations and policies in most sub-Saharan
countries, and where they exist, a lot of times they’re not enforced,” he said.
“A lot of
times the companies have more access to more wealth, more money than virtually
the entire government of some of these countries, and so the power differential
is very strong.”
In her
response, Pawar said she had allocated funds to employ global environmental and
animal welfare agencies as consultants on the project.
“This
project would be implemented with the highest levels of environmental safety as
possible,” she said.
Trade Park
Corporation’s contract with the Meyomessala government listed more than a dozen
international firms that had purportedly submitted bids and tenders for the
project, including household names such as British American Tobacco and Bayer
AG.
Not all
companies replied to requests for comment but those that did, including O’Neal,
Agrilogistics, British American Tobacco and Altria, denied any involvement.
But Pawar
insisted the project is simply “awaiting investment to proceed”.
“In some
documents we highlighted potential investors we felt would be interested in
becoming either an investor in the project itself or a future FDI party for the
government,” she said. “Some “Some of those mentioned were contacted to
discuss, but not all as the project has not yet reached the stage where it
could be presented to them.”
Today, Meyo
AgriPark exists only as a far-fetched proposal in old pamphlets and business
plans, as well as a scattering of markers around the boundaries of the proposed
site.
But the
local government has not given up hope, according to Nkoumou, the municipal
council member in charge of agricultural projects. He said investors from India
and Japan had shown interest, without elaborating.
“We are
ready to receive any sponsors for the project,” Nkoumou said in an interview,
after a day’s work on his farm. “It is a project that will benefit the
community.”
To report
this story, the South China Morning Post partnered with NBC News in New York
and the Organised Crime and Corruption Reporting Project, a non-profit
journalism outfit based in Sarajevo. The Formations House corporate documents
trove, dubbed #29Leaks, is being reported on by 21 news organisations in 18
countries.
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