The Commercial Court of Kigali is set to deliver a final ruling on Wednesday in a high-profile case filed by Chinese investor Huang Zhongkai against Union Stone Ltd, a company owned by Chinese businessman Ting Kuo-Yu (in glasses). The lawsuit revolves around allegations of unpaid dividends, unauthorized use of machinery, and breaches of contractual obligations within a stone-crushing business partnership established to serve Rwanda’s construction sector.
The case has garnered significant attention, especially as it involves a pattern of alleged fraudulent behavior linked to Ting Kuo-Yu, who is accused of scamming numerous fellow Chinese investors in similar business ventures.
The partnership between Huang Zhongkai and Union Stone Ltd was formalized through an agreement signed in 2021. Huang, represented as Party B, contributed RMB 8.48 million (approximately RWF 1.6 billion) for machinery and equipment imported from China to Rwanda, as well as for the construction of the plant. Union Stone Ltd, owned by Ting Kuo-Yu, assumed responsibility for the day-to-day management of the quarry operations. The agreement outlined the respective rights of both parties, with Huang holding ownership of the machinery and vehicles, while Union Stone Ltd controlled the mining resources and related infrastructure.
However, the partnership quickly deteriorated, with Huang accusing Union Stone Ltd of failing to honor its contractual obligations, particularly the payment of monthly dividends based on net profits from the quarry. Huang further alleges that after the partnership was formally dissolved in April 2023, Union Stone Ltd continued to use his machinery without permission, intensifying the legal dispute.
The Commercial Court initially ruled in favor of Huang, ordering Union Stone Ltd to pay RMB 249,494 (RWF 47.7 million) in unpaid dividends, RWF 11.5 million in interest, RWF 10 million for breach of contract, and RWF 6 million in legal costs, totaling over RWF 65 million in compensation. The court also ordered Union Stone Ltd to return the disputed machinery and cease its unauthorized use.
Despite these court orders, Union Stone Ltd continued to operate the quarry, prompting Huang to file an appeal, arguing that the financial losses and reputational damage caused by the breach were far more extensive than the initial ruling acknowledged. The appeal will be heard in the coming days, with a final ruling expected this Wednesday.
Ting Kuo-Yu, the owner of Union Stone Ltd, is reportedly at the center of a broader pattern of fraudulent activities targeting fellow Chinese investors. Huang’s case is not an isolated incident. Ting is allegedly responsible for scamming dozens of investors through similar tactics: promising high returns, securing significant investments, and then failing to honor agreements, misusing machinery, or illegally continuing operations after partnerships are dissolved. These actions have reportedly caused significant financial losses for many individuals who trusted Ting’s business ventures.
As the owner of both Beijing Zhonglei Building Materials Co. Ltd and Union Stone Ltd, Ting’s reputation has become increasingly tarnished, with victims across various sectors in China and abroad accusing him of deceitful practices. Huang’s case represents a rare instance in which an investor has taken legal action, seeking justice through Rwanda’s legal system.
According to the signed agreement, Union Stone Ltd was obligated to distribute profits from the quarry’s operations to Huang monthly, with payments due within seven days of settlement. The agreement also included provisions for arbitration or litigation in the event of a dispute. However, despite these terms, Huang claims that Union Stone Ltd, under Ting’s leadership, repeatedly violated the contract, continuing operations without paying the agreed-upon dividends and failing to return the equipment.
The supplementary agreement, signed in Beijing by both parties, confirmed the legal binding of the contract under both Chinese and Rwandan law, ensuring that any breaches could be pursued in either jurisdiction. Huang’s legal team argues that the failure to honor these terms resulted in significant financial damage, which warrants further compensation.
The ongoing case highlights not only the specific contractual issues between Huang and Union Stone Ltd but also broader concerns about the trustworthiness of certain foreign business operations in Rwanda. Ting Kuo-Yu’s alleged fraudulent practices have raised alarms about the potential risks faced by foreign investors in the country. The legal proceedings are expected to set important precedents regarding the enforcement of business contracts and protection of foreign investments.
Huang has expressed confidence in Rwanda’s legal system, which he believes will offer a fair and impartial judgment. In contrast, Union Stone Ltd, and by extension Ting Kuo-Yu, has not issued any public statements regarding the lawsuit or the ongoing court rulings.
This case is not only a significant commercial dispute but also a test of Rwanda’s legal framework in handling international business disputes. The outcome could influence the future of foreign investments in Rwanda, particularly in industries where transparency and contract enforcement are crucial.
With the final ruling expected on Wednesday, the case serves as a cautionary tale about the potential risks of dealing with unscrupulous business partners. It also emphasizes the importance of adhering to legal contracts, and the need for investors to carefully vet their business relationships to avoid falling victim to scams, as alleged in this case involving Ting Kuo-Yu.
Taarifa will provide updates as the situation develops and the final ruling is issued.
