Chinese state-owned XCMG facing lawsuits alleging it defrauded Canadian equipment dealers

The Chinese state-owned company XCMG is one of the world’s largest manufacturers of heavy equipment.

However, the quality of its products changed five years ago, and the company now faces civil lawsuits alleging that it defrauded equipment dealers in Canada.

At Vancouver’s law courts on Friday, veteran heavy equipment dealer Ryan Martin said they started with XCMG in 2017 and business was good up until about 2021.

“It’s destroyed our family,” he said.

“It’s destroyed our family business.”

Martin’s family company is Arctic Machinery with dealerships in Prince George, Chilliwack and Kelowna.

In recent years, they started selling heavy equipment made by XCMG, but Martin said something changed several years ago.

“The quality of the equipment that time was not what the quality was in the past,” Martin said.

He said other XCMG dealers in Canada also had similar problems and in troubleshooting them, they said they found evidence to support their claim.

“There was a process of changing serial number plates and changing the years of the machines in order to maybe misrepresent to the end user what they were buying,” Martin said.

In July, a Saskatchewan dealer filed a suit against XCMG alleging unlawful tampering with serial number plates on equipment sold to them in Alberta this year.

LTR Equipment, based in Quebec, filed a similar case and a lift company in Ontario has also filed a case, alleging serial numbers were tampered with.

“As an example, it would be built in 2020, but really sold to us as a 2022 machine,” Martin said. “That kind of stuff.”

In a statement to Global News, XCMG Canada said: “Arctic Machinery purchased approximately $18 million in XCMG-branded inventory, which it did not pay for.”

“XCMG is fully defending the claims in the civil actions.”

Martin said his family company was forced into bankruptcy when XCMG called in its loans, which he said was in retaliation for blowing the whistle on the alleged serial number tampering.

RCMP in Alberta’s K Division confirmed that members of their auto theft unit carried out a search warrant at XCMG’s headquarters in April and the investigation is ongoing.