After being sanctioned by the Federal Court of Audit (TCU) and the National Drought Works Administration (Dnocs) for forging documents and rigging tenders, Chinese giant LiuGong continues to compete in and win public competitions.
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Shortly after being banned from signing new contracts with public bodies throughout the national territory – in a secondary decision issued by the TCU – the Chinese company appointed a tractor shop in the interior of Rio Grande do Sul as its “main distributor in Brazil”.
MPM now has exclusivity in sales of machines produced by LiuGong, as well as access to LiuGong’s entire machine support network. In the contract between the companies, which the column had access to, MPM is defined as “the main distributor of the LiuGong brand to participate in tenders throughout Brazil, with full powers to appoint and/or hire partner companies to perform services.”
Through this maneuver, MPM then began competing for bids. In September alone, the same month that MPM became “Master Distributor,” the company won seven competitions, all from Companhia de Desenvolvimento dos Vales do São Francisco e do Parnaíba (Codevasf), to supply backhoe loaders, hydraulic excavators and graders to cities in Maranhão, Goiás, Rio Grande do Norte and Paraíba. Adding notices worth more than R$ 145 million,
Forged documents
According to a TCU report, the Chinese giant submitted at least three false documents when participating in the bidding at Dnocs, in 2023. The bid was opened by the state-owned company to purchase hydraulic backhoe loaders.
To participate in the tender, companies must submit a declaration from the technical assistance network authorized in the nine states in which Dnocs operates (Ceará, Alagoas, Paraíba, Rio Grande do Norte, Pernambuco, Piauí, Bahia, Sergipe and Minas Gerais).
Under these circumstances, Liugong submitted at least three false documents – claiming to have received technical assistance, which was not true, because the workshops themselves denied the partnership.
The first conviction was in September 2024. But Minister Jonathan de Jesus quickly overturned the decision. In July this year, the rapporteur of the case, Walton Alencar, reinstated the convenience penalty, but reduced the period to one year.
Chinese giant
LiuGong has been operating in the international market for more than 65 years and today has revenues of $1 billion. The Chinese company arrived in Brazil in 2008, and since 2015, it has been manufacturing equipment in the country.
The company has collected contracts worth R$200 million, between 2023 and 2024, with Companhia de Desenvolvimento dos Vales do São Francisco e do Parnaíba (Codevasf) for the supply of backhoe loaders, hydraulic excavators, motor graders and wheel bulldozers.
When contacted, LiuGong did not comment on the matter. The field remains open for potential placements.
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