SCANDAL! Paul Zhang, the Chinese billionaire owner of Tian Tang in trouble; Uganda Railways sues his steel firm for stealing UGX11.4bn worth of rail line to feed his steel factory Ironically as government is frantically looking for money to rebuild the vandalised railway line to reduce the cost of doing business for investors like him, the Chinese billionaire's firm was caught red-handed with stolen rail sleepers that were being converted into steel products.

Uganda Railways Corporation (URC) has sued Chinese firm Tian Tang Group Limited for alleged theft and vandalism of railway line materials valued at UGX 12 billion.

Uganda Railways is a government-owned company that oversees maintenance all railway infrastructure, installations, locomotives and equipment on behalf of the sovereign republic of Uganda.

According to the suit details, URC accuses Tian Tang Group Limited of destroying up to 14 tons of railway materials recovered from the billionaire’s factory complex at Mbalala, Mukono.

“Following a tip-off and a court-sanctioned search of the defendant’s/Tian Tang premises at Mbalala Mukono conducted by the Uganda Police, 14 tons of the plaintiff’s railway materials/equipment were recovered at the Defendant’s aforesaid premises and in a state where they were not re-usable neither could they be reinstalled by the plaintiff thereby occasioning the plaintiff colossal financial loss,” reads the suit.

On March 29th 2021, Mukono Grade Two Magistrate Steven Waidhuuba issued an order to search the premises of Tian Tang for rail sleepers and steel rails. The search was witnessed by Uganda Railways Corporation and security officials led by Captain Henry Mawejje and Superintendent of Police, Agnes Agabirwe.

According to Uganda Railway Corporation, Tian Tang had already crushed and converted some of the materials into different products, thus rendering them unusable. 

“The plaintiff (URC) shall aver and contend that all of the said actions of the defendant were illegal, callous, criminal, detrimental to a public good railway works infrastructure, and in most material particular, the defendant facilitated vandalism of the plaintiff’s railway installations/equipment/materials by providing a black market for the same reason of which the plaintiff shall propose to the court that the defendant be condemned to punitive damages”, the suit adds.

Uganda Railways Corporation argues that the actions of the Chinese Company amounted to an actionable conversion purposed to permanently dispose of its property.

Through their lawyers, Engoru, Mutebi Advocates, URC want the court to order Tian Tang to compensate URC UGX11 .4 billion for the replacement of the rail materials and lost value as well as compensation and UGX150 million as cost of reinstatement and UGX400 million as cost of freight, insurance, procurement and other related costs.

The High Court Civil Division Registrar Jamson Karemani has already issued summons to Tian Tang Group Limited to defend itself within 15 days.  

The case is a blow to Zhang, who is an influential figure in the Chinese business community, as well as a major investor. Over and above his Tian Tang industrial complex in Mbalala, Mukono, he also owns the Tiangshan-Mbale Industrial Park Project.