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Court has issued an arrest warrant against a Chinese investor, Jun Zhang, for falsely claiming ownership of a multi-billion-shilling company.

The warrant of arrest was issued by Buganda Road Court Chief Magistrate, Ronald Kayizzi, on Tuesday after Zhang failed to turn up in court to answer charges of obtaining registration by false pretence and conspiracy to defraud.

“The Police should arrest the said person and produce him in court so that he is prosecuted for the offences levelled against him,” the magistrate ordered.

Kayizzi also directed the prosecution to speed up investigations in the matter so that the case, which has dragged on for two years, can be heard expeditiously.

Zhang is battling the charges together with Hu Zheheng, who is currently out on a cash bail of sh3m. Zheheng’s four sureties including his wife, Luo Youyou, were each directed to execute a non-cash bond of sh10m.

Four people standing surety for accused Hu Zheheng, who allegedly claimed ownership of Entec Electrical Equipment Company Limited at Buganda Road Chief Magistrates' Court in Kampala. Among the sureties include his wife Luo Youyou. (Photo by Michael Odeng)

It is alleged that the accused persons used the strict COVID-19 near-inactivity and absence of the Director General, Chen Chao, to fraudulently register themselves with the Uganda Registration Service Bureau as the directors of Entec Electrical Equipment Company Limited.

The company deals in the manufacture of concrete electric poles. The court heard that the accused persons allegedly stole 700 poles. According to Chao, one concrete pole is sold at $400 (sh1.5m).

Court documents indicate that Zheheng, the former director of the said company and Zhang the former sales head, claimed 50 shares each. The accused is represented by defence lawyer Denis Twinomugisha.

Under sections 309 and 312 of the Penal Code Act, the offence of conspiracy to defraud attracts a maximum sentence of three-year imprisonment, on conviction, while obtaining registration by false pretence elicits a one-year jail term.

The Buganda Road Court Resident State Attorney, Joan Keko, informed the court that investigations into the matter is incomplete.

“I pray that you adjourn the case to another date to allow the police to complete the investigations,” she requested.

Bail condition

The court released Zheheng on bail after finding his sureties substantial. The sureties were not objected to by the state attorney.

The magistrate directed Zheheng to deposit in court his passport and Local Council One (LCI) letters, indicating his place of residence at Mbuya Nakawa Division in Kampala district.

The court also observed that the nature of the offences is bailable because it is related to business.

The court also heard that Zheheng has been diligently reporting to the Police since 2022 in fulfilment of his bond terms and that he has been doing business in Uganda for the last eight years.

Allegations

Prosecution alleges that Zheheng and Zhang on June 27, 2017, at URSB offices in Kampala City, wilfully procured their registration as the only subscribers of Entec Electrical company under the Companies Act, by falsely representing that they are the only subscribers desirous of being formed into the said company with a shareholding of 50 shares each, whereas not.

Complainant speaks out

During the court proceedings, the complainant Chao said the Police officer who first investigated the matter was transferred to Moroto because of the accused persons influence, a reason why the case has stalled for two years.

He also disclosed that High Court Judge Esta Nambayo issued an order, restraining the parties from dealing with the property, a directive he says the accused persons have disobeyed.

“Some of the equipment including trucks of the company are missing, prompting deployment of the Police and the army to safeguard the property,” Chao told court.

The case has been adjourned to February 12, 2024 for mention.