Company Squabble Sees 16,000 Tons of Wheat Go to Waste
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2017-05-09 12:54:40

State-owned China Grain Reserves Corporation, also known as Sinograin, has squandered 16,000 tons of wheat after it was unable to resolve a warehouse contract dispute, news agency China News Service reported Monday.

According to the terms of its 2010 lease with Jinshuo Grain and Oil Co. Ltd., an agricultural storage company based in central China’s Henan province, Sinograin agreed to pay 50 yuan ($7.20) per ton per season to keep its grain in Jinshuo’s warehouses.

Sinograin stored some 16,000 tons of wheat — roughly the same amount the United Kingdom produces annually — in Jinshuo’s facilities.

However, court documents reportedly indicate that Sinograin has not paid up since September 2010.

That year, China’s National Development and Reform Commission, an economic planning agency, issued a regulation allowing companies that store grain to receive 0.70 yuan per kilogram per year in government subsidies. According to China News Service, Zhang Chunqing, Jinshuo’s owner, alleges that Sinograin was able to pocket 4.5 million yuan in subsidies this way, all while neglecting to pay according to the terms of their lease.

Zhang said that over the years, he watched as the idle grain spoiled to the point that not even pigs would eat it. When he finally reported the matter to local authorities, he said, Sinograin workers showed up with a fleet of trucks to dispose of the evidence.

Sinograin, for its part, has accused Jinshuo of refusing to cooperate when it tried to transport the wheat to a buyer after selling it at auction in 2015, according to a local newspaper.

The Xinye County People’s Court in 2016 reportedly ordered Sinograin to pay Jinshuo 1.9 million yuan in arrears, but Zhang argued that because one of the contract’s terms adds 0.3 percent interest for each day payment is delayed, the actual amount Sinograin owes his company is much higher.

When Sixth Tone contacted the Xinye County government, the grain bureau’s vice head, Li Jingwei, confirmed that several legal sessions on the issue had taken place but would not elaborate on any details. No legal documents regarding the dispute between the two companies could be found on China Judgments Online, an incomplete database of court verdicts.

An employee at Sinograin’s Henan branch answered the phone when Sixth Tone called but said she could not discuss the matter because of a pending government investigation, and an employee who answered the phone at Sinograin’s headquarters in Beijing said he could neither comment nor transfer Sixth Tone to a public relations representative.

Additional reporting: Zhecheng Qian; editor: Kevin Schoenmakers.

(Header image: Workers wearing face masks sweep wheat inside Sinograin’s grain depot in Pingdingshan, Henan province, June 30, 2014. He Wuchang/VCG)