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Smart City project. Odd investors

Smart City project is to be launched in the coming days. The government of Kyrgyzstan promised that the first cameras would be installed at the end of January. Meanwhile, disputes around the project investors have not ceased. 24.kg news agency carefully studied the data to understand who would build «Smart City» after all.

Huawei. No claims, but if to take closer look

The Chinese company Huawei will implement the project. Perhaps, it is the least suspicious company of the three participants in the deal. Anyone will hardly doubt the fact that it has experience in similar projects, a well-known name and money.

Huawei is one of the world’s leading manufacturers of telecommunications equipment. The company, which is represented on all continents, employs 170,000 people. According to experts, its products and services are used by a third of the world’s population.

The market of Kyrgyzstan is familiar to the company. Almost all cellular operators purchase equipment for base stations from Huawei. It was also engaged in larger projects. However, until now cooperation experience with the authorities cannot be called successful.

Huawei twice tried to get a contract for the implementation of Safe City project — in 2012 and 2014. In 2012, the Ministry of Internal Affairs announced a tender for the development of technical specifications for introduction of an automated video surveillance system, photo and video recording, photo and video identification in Bishkek, technical specifications for the creation of a Single Electronic Center for registration and recording of crimes under the Ministry of Internal Affairs. Huawei participated in the tender, but lost.

The situation repeated in 2014. The Ministry of Internal Affairs again announced a tender for the installation of video cameras as part of Safe City project. Eight companies submitted the applications, including Huawei, but the company did not even pass to the second round of the competition because it did not meet the selection criteria.

In 2015, a scandal broke out when the State Service for Combating Economic Crimes arrested the operating accounts and property of Huawei Technologies Bishkek Co LTD.

The company and the management of Kyrgyztelecom OJSC were accused of overstating the cost of works when laying fiber-optic communication line Osh-Irkeshtam. $ 300,000 were spent on the work, and the documents stated about $ 3 million. Later it was reported that the State Service for Combating Economic Crimes appealed to the PRC with a request to extradite the directors of the LLC. However, there is no data on the end of the story.

Huawei also showed its unpleasant side in other countries. The company was accused of industrial espionage, copying technology and dishonest advertising. Huawei also has access restrictions to markets.

Similar conclusions on the company’s products were made by the competent authorities of Great Britain, Australia and India. The European Commission at all accused the Chinese company of dumping and receiving illegal subsidies.

Odd project participant

The most modest participant of the project — AKA Minerals and Mining company — causes most of all questions. It is Aka Invest already. The company invests $ 9 million in Smart City, wants to buy MegaCom, but its office was officially located first in a private house, and then in a cafe in the market. The company does not have any official website.

According to the Ministry of Justice, the founder of AKA Invest is the German company AKA Petroleum. It has nothing to do with IT sphere. The company is engaged in oil and gas production. To find confirmation of the seriousness of the investor’s intentions, 24.kg news agency sent an official request to the company. However, we did not receive any answer.

According to information provided by the press service of the government, AKA Petroleum is a member of AKA Group. There is no mention of this on the website of the foreign founder of AKA Minerals and Mining. We tried to look for AKA Group.

The attempt to look at the official website of AKA Group failed. Its main page says that «relaunch coming soon.»

«You will need an idea for a business before you do anything else. Making ideas grow is what we do best. We are more than just accountants, we will be your advisor, partner and mentor through your journey,» it says.

And, at the same time, it offers to register to receive notifications about the relaunch and upcoming events. It’s strange, is not it?

Message of the government mentioned one more company AKA International. Surfing the Internet, we found the right page. It says that AKA International, like AKA Petroleum, is a member of AKA Group. The range of interests of the latter is extensive — from oil production to construction of hotels and investments.

It is impossible to contact the head office and find out why the company suddenly decided to invest in Kyrgyzstan. The website contains only the contacts of AKA International and two other companies. There is no AKA Petroleum among them.

The search resulted in the website of Aspin Kemp & Associates (AKA). There is no information that it is in any way connected with AKA Petroleum on official website of the company.

Who is he, the chief investor?

Because of all the hype, the public somehow forgot that most of the money is invested not by Huawei or Aka Invest, but Beijing China Veterans Lingxin Capital Management. Under the agreement, Huawei only delivers the equipment and installs it, but it has not right to invest $ 60 million. Instead, Beijing China Veterans Lingxin Capital Management invests the money.

The main investor is Beijing China Veterans Lingxin Capital Management. The company invests in the Smart City project $ 51 million. And Kyrgyzstan just needs to return this amount without any interests.

At a press conference after signing the contract on Smart City, the Foreign Business Development Director at Beijing China Veterans Lingxin Capital Management Liu Bo Yui told reporters that the company is state-owned. The main direction of its work is the development of business outside the PRC.

«In addition, we help with the implementation of major projects. Priority value is the development of bilateral state relations. There is not any financial interest,» concluded Liu Bo Yui.

After such a loud statement by the representative of the Chinese company with an emphasis on priorities in the sphere of state relations, an important question arises: Do investors have problems only in Kyrgyzstan?

There is no data, even one line, on the Internet about Beijing China Veterans Lingxin Capital Management.

All the reports are connected exclusively with the news about signing the agreement with the government of Kyrgyzstan on Smart City. There is not a single information in English or Russian about the company’s previous activities.

We tried another track. We looked at how Safe City project was implemented by the neighbors in Dushanbe (Tajikistan). Huawei also dealt with the project . Most of the funds are a preferential loan from the People’s Republic of China issued within the framework of SCO. There are no references to third-party companies and funds, like Beijing China Veterans Lingxin Capital Management.

It’s strange that there is no open information about the investment fund, which manages, according to the government, $ 5 billion.

Having studied all the investors of Smart City, we can conclude that only Huawei has the capacities to implement the project of the government of Kyrgyzstan. The other two companies do not carry a little credibility.

Will it turn into another scandal?