LADOL Lied over Ownership of $300m Fabrication Yard, Says Samsung


Hamid Adedeji

Samsung Heavy Industries Nigeria (SHIN) has described as false, a claim by the management of LADOL Free Zone in Lagos that the integration and fabrication yard in the free zone does not belong to Samsung, saying it invested $300 million to build the yard.

LADOL had reportedly cancelled the operating licence of SHI at the free zone, citing alleged breach of agreements.
The Nigerian firm has since denied SHI access to the multi-million dollar fabrication and integration yard, the only such yard in Africa, built by SHI for the integration of the $3.3 billion Floating Production Storage and Offloading (FPSO) unit for the 200,000 barrels per day Egina deepwater oilfield.

But in its first official reactions to the cancellation of its operating licence by LADOL, the company said in a statement yesterday that it did not receive any money from any international oil company (IOC) to build the yard in LADOL free zone.

“This issue has even been brought in the Senate and has been cleared years back. However, LADOL brought this issue back to light to make their name famous by using Samsung as a leverage. For the record, SHIN did not receive any money from any IOC for the establishment of the yard. One hundred per cent of the investment was made by SHIN’s own money. LADOL has not invested any cent into that yard and SHIN is fed up with LADOL’s mis-representation,” the statement said.
SHI, which also accused LADOL of misleading its lawyer, also described as unethical, the statements credited to the lawyer on matters that were already before the courts.

On the ownership of the SHI -MCI FZE, which is the company that operates the fabrication and integration yard, Samsung stated that LADOL, which is represented by MCI, holds 30 per cent interest, while SHI owns 70 per cent stake in the yard,
“Due to inability of MCI (LADOL’s subsidiary) to bring equity for 80 per cent share in 2013, we had to agree on making MCI to be the proper partner by giving them 30 per cent share of SHI-MCI FZE. Through lengthy arbitration, we agreed that the SHIN with 70 per cent share will operate SHI-MCI, while MCI with 30 per cent share will stay non-executory directors. Basically, SHIN paid MCI to make them a shareholder. Thus, it is utterly out of logic that LADOL and MCI has brought this matter to court. Their request to give them back 50 per cent can only be seen as ungrateful action. If they wanted more shares they had choice to exercise call option, which they have not,” the statement explained.

Also reacting to the issue of the outrageous land lease fee SHI-MCI paid to LADOL, which was more than $70 per square meter yearly, Samsung stated that the usual standard rate paid for land belonging to the Nigerian Ports Authority (NPA) is 67 cents per square metre yearly.
Further to the Sub-lease agreement between SHI-MCI FZE and GRML, SHI MCI FZE has paid for five years lease up-front, from 2014 till 2019. There is no doubt that SHI-MCI has right to enjoy the ownership of the land, even against landlord’s unjustifiable action.

LADOL is badgering on SHI-MCI with groundless statements, which amounts to actually material breach of their own. Statement of falsehood is their tactic to claim ownership of our investment and facility.
The global giant also accused the Nigerian firm of disobeying court order by cancelling its operating licence.
According to the company, the management of the free zone had also cancelled several operating licences of other companies in the free zone, without justifiable reason.

“Thus, their rejection against current court of order and federal government directive is their typical act of device to illegally take away all the investments,” SHI argued.

SHI also described its Nigerian partner as the worst service provider, local vendor, free zone management company and landlord because of the following reasons:.
“Their blunt refusal to process immigration files, which led to severe damage to the project. The usual processing of the visa files at Nigerdock Free Zone takes one week. However, it takes up to eight weeks at LADOL Free Zone. It is due to their intentional harassment and sabotage action,” the company said.
The statement also noted that there was always 30 minutes’ delay in their operations at the free zone due to late ferry service provided by LADOL, adding that this led to loss of manhours.

“We always pay 20 per cent above our requested number, so that whenever ferries are down they can rent third party ferries. However, they do not arrange or rent from the third party, but only SHI-MCI suffers loss from their inaction. When LADOL promoted their yard, they had promised that there will be a power plant and it will be ready before the SHI-MCI finished its construction of the yard. However, they could not bring the generator and did not take any action on the agreed date. SHI-MCI had to pay upfront to LADOL to rent generator from foreign company.

“Whenever senior government officials visit SHI-MCI yard, the MD (Managing Director) of LADOL leads the tour of the yard, and does not allow any Samsung official to take part in the tour. The misrepresentation is too high that LADOL was awarded the recent SNEPCo contract through false representation. They fly the drone over SHI-MCI yard without any notice to SHI-MCI, and they use the pictures in their PPT. This is clear Intellectual property infringement over our site, and the technology.