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Chinese firms swindle Nigerian importers
By Yemi Ajayi
Sunday, February 20, 2011
•Paul Orhii
Photo: Sun News Publishing
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The managing director of a Lagos-based company, which deals in chemicals, Mr Jude Ekolie (not real name), thought he had a good bargain when he decided to patronise a Chinese company when he was planning to buy merchandise for his firm. Although his fingers had once been burnt in a similar deal in the past, he knew that this was the time to ponder the aphorism of once bitten, twice shy. Risk taking, he had ruminated, is part of entrepreneurship.

Of all the quotations he got, he picked that of Tianjin Jinlaifu Chemicals Company Ltd., Tianjin, China, as the best. But this time he was more careful. So he thought.

In his earlier transaction with another Chinese firm, Hebei Bofate Chemicals Company Ltd, he had on June 15, 2010 wired $2930 through telegraphic transfer for the shipment of water treatment chemicals to Nigeria. But till the time of this report, he had seen neither the goods nor his money. To worsen matters, all efforts to contact the company through its representative, Susan Zhang, came to nought. It had disappeared into thin air.

Given his previous experience, he decided to resort to what he thought was a foolproof method: paying through a letter of credit. His bank, under his instruction, had on August 26, 2010 opened a letter of credit for $14,596.20 with Citibank, New York. Under the terms of payment, the Chinese company is to ship 18.36 metric tonnes of calcium hypochlorite (used for water treatment) to the importer through the Apapa seaport in Lagos.

Payment was to be done through the correspondent bank upon confirmation of the receipt of the chemicals. That did not, however, stop Tianjin Jinlaifu from defrauding him.
But how did the transaction go wrong? Narrating his experience in an interview with Sunday Sun, Ekolie, who was on the Internet chatting with one of the company’s representatives said: “One of the reasons we chose the Chinese was that their price was attractive. While other companies in Europe were quoting around $1,000 per tonne, the Chinese quoted about $600. There was little variation in all the quotations we got from China. So, we settled for Tianjin Jinlaifu with the hope that we would get value for our money.

“Contrary to our agreement, the company shipped to us chemicals that were below the specification we ordered and paid for. We were supposed to be supplied the chemicals in granules. But it was the powder form that was shipped to us. You see, the powdered form is of low quality and it is not a fast-moving product here in Nigeria.”

Shortly after the company received the goods, it asked its bankers, First Bank, to direct Citibank not to honour the letter of credit for now. It brought the matter to the attention of Tianjin Jinlaifu, hoping there was an error that could be rectified. Rather than attend to its complaint, the company gave him a hard choice: ship the goods back. That was when the company knew that it had fallen into the net of another Chinese dupe.

Ekolie said: “We were disappointed. Shipping the goods back is going to be at the detriment of our company. We will require about N1 million to do that. After a long negotiation, the company suggested we should find market for it and sell at a lower price. After that, we instructed our bankers not to pay the full value of the letter of credit.

“Ordinarily, the money should have been paid to the Chinese company after we had received the goods. But our saving grace was that the goods arrived Nigeria before the due date on the letter of credit. So, that gave us enough time to halt the payment as the terms of the transaction had been breached.”
Given his earlier experience, were there no telltale signs that danger was looming? “Yes, there were,” he confesses.

“At the early stage of the transaction, Tianjin Jinlaifu was trying to put some stumbling blocks on our path after we had agreed on the terms of transaction. Shortly after we sealed the deal, the company was delaying the shipment of the goods. On enquiry, its officials advised us that we should buy caustic soda so as to stop Chinese authorities from intercepting the goods. At a stage, we felt the company was only trying to make us part with more money. We began to suspect it had no intention of fulfilling its own side of the bargain,” he added.

Ekolie dismissed claims that his company did not take enough steps to guarantee the fidelity of the transaction and that it should have been suspicious of the low price quoted by the supplier. He said when his company was considering employing an inspection agent to check the goods before shipment, Tianjin Jinlaifu discouraged it, claiming that it could delay the exportation of the goods as Chinese Customs could subject the process to undue bureaucracy.

“Let me say that we knew that we were taking a risk doing business with the Chinese, but risk taking is part of entrepreneurship. Unfortunately for them, there was a delay in payment as we asked Citibank to stay action on payment. Now we have been able to broker a better price deal with them. They set out to defraud us in the first instance. The game plan was to ship the wrong product, get paid before we get to know what hit us.

“Regardless of the very poor credit rating of most Chinese firms, China still remains the second biggest exporter in the world. Not even the United States can ignore the emergence of the Asians.
“That probably explains why Hu Jintao (the Chinese president) got a red carpet treatment at the White House. By 2020, China may overwhelm Germany in the export business. So apart from lower prices from their firms, the Chinese have a lot of things going for them.
“Moreover, there is no entrepreneur who does not take a risk regardless of how astute and successful. There are so many bitter lessons that one cannot learn even from the leading business schools in the world.

“However, I accept the fact that we must learn from our mistakes. Most importantly, it is our desire to enlighten others so they could have a smooth learning curve. When any Nigerian company loses, we see it as a great loss to the nation. That explains why we are crying out,” Ekolie said.
Unfortunately for Ekolie’s company, the matter may drag on endlessly as Chinese police have closed down Tianjin Jinlaifu and arrested some of its officials. Ekolie told Sunday Sun that he learnt that some of those the company had defrauded reported the matter to the police. He, however, decried the attitude of the Chinese Embassy in Nigeria to reports of alleged frauds committed by Chinese companies and individuals.

“When we went to report the matter to the Commercial Section of the Chinese Consulate, located at Idejo Street, Victoria Island, Lagos, the officials were not cooperative. We met other importers with similar tales of woes. Even if you request for a visa to go to China to sort out the problem with the exporter, you are not likely to get it,” he said. Sunday Sun investigation show that many Nigerian exporters of chemicals are victims of sharp practices by their Chinese trading partners. One Nigerian importer was said to have lost over N20million in such a transaction with the Chinese.

Curiously, many of them are not willing to go public with their experience. During visits to Ojota and Ilasamaja, two popular chemical markets in Lagos, some of the traders confirmed that they had had nasty encounters with the Chinese but they declined to give details.

Ekolie attributed this to the need to protect their business. According to him, they deal in regulated products and publicity such as this could raise customers’ suspicion that could affect patronage.
“Many of us deal in a market whose products are regulated by the National Agency for Food and Drug Administration and Control (NAFDAC).

We are trying to avoid the prying eyes of the agency as such reports could make its officials beam their searchlight on us. That will not be good for business,” he said.
Officials of the Commercial Section of the Chinese Consulate in Lagos declined comments on these allegations. A consulate official, who simply identified himself as Jack, told Sunday Sun on the phone that the consulate was closed for business and would not reopen until after two weeks

http://www.sunnewsonline.com/webpages/news/national/2011/feb/20/national-20-02-2011-003.htm

Nigerians be careful while dealing with Chinese.

But how could the man be that stupid to order stuff that like chemicals from China and expect them to give it like that?He is suppose to take a trip and see what he is buying and pay and ship then head back to Nigeria.A friend recently came to China to order for antimalarial drugs worth about 10million after ordering he paid and left.When the goods arrived naija it was discovered that half of the container was stocked with fake drugs.
So its always advisable when you come to China get the police involved tell them what you are there for,though it will cost you something but if the company knows that the Police is involved they will thread carefully.And even if they cheat you you stand the chance of recovering your money.

We have to be careful for dealing business with others. Keep watch it stickly!!

This shouldn't be on the front page.How many times have u posted the stories of how naija guys swindle chinese companies?
Most chinese are reputable,na our brothers spoil them

Why not? After all it is an important warning that we should not be complacent when doing business with other countries.

ObamaUS:

This shouldn't be on the front page.How many times have u posted the stories of how naija guys swindle chinese companies?
Most chinese are reputable,na our brothers spoil them

afterwards they go talk say na nigeria criminal pple dey !

chinko style lol

ObamaUS:

This shouldn't be on the front page.How many times have u posted the stories of how naija guys swindle chinese companies?
Most chinese are reputable,na our brothers spoil them

Why shouldn't it be on the front page if possible on CNN. I believe if it was a Nigerian that did this, CNN network and Aljazeera will broadcast it life.

I am beginning to ignore or will actually forget my sign up here at nairaland because it is now being inflated by not only vain minds but many that will NEVER want to learn but rather will open their ignorant mouths on any thread. I lost $2200 to a Chinese firm last two years. It is a fact. I was in China late last year and got some details i would have revealed here that will open the doubting TOMS eyes. I have some very reliable company i deal with now but i want to tell any Nigerian that wants to do business in China to beware, especially if you are doing Bank Wire Transfer, S I M P L E


This thread should be at the front page

ObamaUS:

This shouldn't be on the front page.How many times have u posted the stories of how naija guys swindle chinese companies?
Most chinese are reputable,na our brothers spoil them

You sound so ignorant and you have bought into the western propaganda about  your fellow Nigerians,Nigerians are good people with lots of energetic entreprenurs who try their best despite the bad government .Good government good image.so will you say all ghanians are good?

why didnt they go thru chamber of commerce in china?

one has to be careful when dealing  with the chinese as most of them always seem to cut corners. If you intend dealing with a chinese for the 1st time; if the worth of the goods you are interested in is $30,000, why not reduce the goods to about $5000 worth and place 6 orders piecemeal to attain the $30,000? With such a move, you get to realise if your guy is genuine or not. By the time you get to |$15,000, you will talking of going to China yourself, you see? Slow but secured means of trading with a people with a propensity to fraud that will revile us Nigerians!!!

Hmmn

As a CEO of marketing firm that handles supply chain management for its clients. Importation is a risky venture that both the buyer and seller shouldn’t trust themselves irrespective of years of knowing each other. There are international laws that protect both the buyer and seller, so you as the importer should know all those laws and observe all procedures while engaging in importation.

The importer omitted a lot of things from his story; they were trying to jump some importation procedures which would have caused them the money if not the Letter of Credit that saved them. My elders said: there is no trust in the jungle.

I have watched Nigeria importers lost millions of Naira just because of their selfness. A friend of mine lost US$58,000 to a Belgium company because of the same mistake that most Nigeria importers make everyday. Guys, most exporters all over the world are the same which is taking advantage of any single mistake the importer make during the transaction.

I just don’t understand why a seller asked the importer to forget Inspection agent and he agreed. Why the importer or his bank never request Risk Assessment Report of the product. There are a lot of mistakes the importer made during the transaction.

If it were a Nigerian firm that did this, everyone (including Nigerians) would be making noise about the image of our country. This is China and i hear no one talking much. Even on B2B websites where i run some of my export business, over 80% of the traders there are all scammers. You will pay for a specific order of goods and get something substandard in return (and on top of that, in lesser quantity). Some of them will rip your money outright and you'll never hear from them again.

What really annoys me is that these people are treated with utmost respect in western nations in spite of all their scams. Their scams are by far more outrageous and more destructive than the so called Nigerian 419 but are they called scammers or other derogatory names in US,CA or EU? No!

Too bad.

now i believe that you have to be "very" greedy to get duped!
From 1000$ to $600$ that should sound fishy to anyone. he has learnt his lesson 2wice. let us hope he does not learn it really bad again  

ofala,why should you send money through bank wire transfer?

The only truest and safest ways to do international trading are as follows:
1.Never conclude a deal upon mere email correspondences without physical touch and meetings ;
2.Never yield into making payments through any other means asides from STANDBY LETTER OF CREDIT/BANK-TO-BANK      DEALS,Here,your bank and their bank would serve as escrow intermediaries for the protection of all parties
3.Never start a deal with them until you confirm their membership status at the international chamber of commerce and industry of both nations/countries concerned on the sides of all parties.

4.Used licensed buying and selling verifiable agents

5.Check up with all countries' anti-fraud government authorities for their updated list of blacklisted companies and business organisations
6.Use a notary public attorney who need to help you confirm their proofs of utility bill,national identity,passport,etc etc

GOD BLESS YOU ALL.
info@xpluscompany.com
+2347090483443

if i must add, this must have happened to so many nigerians, even being swindled by europeans! yet we only tell ourselves and lick our own wounds!

if the reverse were to be the case, this would have made headlines on the sun UK: "A NIGERIAN SCAMMED CHINESE INVESTORS, PLACED ON FBI MOST WANTED LIST"

DID SOMEONE SAY CHINESE, EVEN THE MUCH TALKED ALIBABA WEBSITE NA FRAUDSTERS

http://edition.cnn.com/2011/BUSINESS/02/21/alibaba.online.fraud.ft/index.html?hpt=Sbin

this is GEJ'S fault.

sarutobi:

if i must add, this must have happened to so many nigerians, even being swindled by europeans! yet we only tell ourselves and lick our own wounds!

if the reverse were to be the case, this would have made headlines on the sun UK: "A NIGERIAN SCAMMED CHINESE INVESTORS, PLACED ON FBI MOST WANTED LIST"

Abi ooo!

And people on this forum would have muttered " Nigerians again?". I wonder where they are silent now.

againstGEJ:

this is GEJ'S fault.

babasoty:

DID SOMEONE SAY CHINESE,  EVEN THE MUCH TALKED ALIBABA WEBSITE NA FRAUDSTERS

http://edition.cnn.com/2011/BUSINESS/02/21/alibaba.online.fraud.ft/index.html?hpt=Sbin

(1)Alibaba
(2)Alisoft
(3)Alimama
(4)Taobao
(5)Amazon

And so on. They are all there (Chinese people), ripping victims off on a daily basis but it doesn't make CNN or BBC but when a Nigerian dupes a white man of $800, his face will be published on the media as "America's most wanted". . .thanks to OBJ and Ribadu's run down campaign.

A major gaffe on the part of the importer was his decision not to use an inspection agent.

ObamaUS:

This shouldn't be on the front page.How many times have u posted the stories of how naija guys swindle chinese companies?
Most chinese are reputable,na our brothers spoil them

Shut up and never open that dirty mouth of your's.
Na only 9gerians dey dupe? Now you will agree that the whites are even bigger fraudsters.
Where is CNN, BBC and that foolish Aljazeera to broadcast this?

The money I sent since 2008 through bank wire transfer to bring in laptops from China is still in china while the laptop is not in Nigeria. Chin chon crooks

I am glad that some Nigerians are now being swindled by Chinese firms; that way, these same Nigerians will know how it feels when some of our Nigerian brethren--through 419 schemes--swindle from other foreign folks money and expensive merchandise. Please I am not by any means supporting wrongdoing, but I am sick and tired of some, if not a substantial majority, of Nigerians who condone (or who do not vehemently condemn) 419 activities being perpetrated by our fellow Nigerian brethren. Now when the hunter becomes the hunted, he will know how it feels to be hunted.

you gotta pay the piper at some point in time. this is the case of the chicken coming home to roost. and as a farm-boy myself, chickens coming to roost never made me sad. in fact it made me glad

There are bad eggs everywhere. I have only been swindled by americans x 3, anyways,

He that breaks the edge,the serpent will bite, There are better ways to do international biz rather than looking for cheap products and u end up getting scammed.
Greed and avarice are two major things that lead a man into utter destruction,