LADOL refutes Samsung’s claims, restates commitment to local content
Irked by the barrage of sponsored advertorial titled “True position on investment in Nigeria and challenges faced from LADOL”, in several national newspapers in recent weeks by Samsung Heavy Industries Nigeria Limited, the Lagos Deep Offshore Logistics (LADOL) Base (including GRML) has described Samsung Nigeria’s claims as attempts to thwart Federal Government’s directives on local content and smear LADOL’s reputation with falsehoods.
Speaking at a press roundtable in Lagos, Dr. Amy Jadesimi, CEO, LADOL said “Samsung’s advertorial was confused and contradictory, as they struggled to make the facts fit their false narratives.”
According to her “LADOL’s development began in 2001 by a group of indigenous Nigerians who put a masterplan together to build an industrial Free Zone for Nigeria. – twelve years before Samsung was invited into the Zone. Since 2004, many private indigenous Nigerian families and institutions have invested heavily in transforming the Zone from a disused swamp into a fully operational 24/7 Free Zone and logistics base – with quayside, warehouses, accommodation, power, offices. LADOL had also carried out one of the largest Rig repairs ever done in West Africa.”
Jadesimi disclosed that “in 2010, Samsung approached LADOL to help in fulfillment of the local content requirements of the Total Upstream Nigeria Limited tender for an EPC to build an FPSO for Nigeria. LADOL already had a masterplan which included an FPSO fabrication and integration Yard. LADOL partnered with Samsung and provided the winning local content plan, which Samsung submitted as part of its tender to Total.
In 2013, Samsung won a USD 3.2 billion contract from Total as the contractor for the Engineering, Procurement and Construction (EPC) of the Egina FPSO. At this point, LADOL invited Samsung into its Free Zone to form a Joint Venture (JV) company to fulfil the local content requirements of the Egina FPSO contract.
The contract signed between Total and Samsung clearly stated that the JV company was to be owned 80% by LADOL, 20% by Samsung. Furthermore, the Total contract stated that during Egina, the JV would build and Samsung would run the Shipyard in LADOL Free Zone.
After Egina, Samsung agreed that the Shipyard would be run by LADOL to fulfil its aim of creating jobs and transferring technology into Nigeria.
However, in November 2019, as the Egina project ended, rather than fulfilling the agreed local content and JV objectives, Samsung tried to steal the land in LADOL Free Zone, which the JV was occupying as a sub-lessee to LADOL, by purporting to procure an irregular direct lease from NPA.
Samsung’s attempted theft took place despite and contrary to a concluded mediation anchored by the Nigerian Content Development Board (NCDMB), a court order of status quo from the Federal High Court FHC/L/CS/1263/2018, and pending arbitrations in London – initiated by Samsung.
Samsung requested that NPA cancel LADOL’s lease with NPA and grant Samsung a direct lease on land which LADOL has held, developed, and invested in since 2004. Thankfully, the Federal Government saw through this attempted theft and issued a directive on 3rd June 2020 confirming that LADOL’s lease remained valid and subsisting and the purported lease between Samsung and NPA was terminated by letter from NPA to Samsung dated 10th June 2020 Ref: HQ/GM/BSLA/OP/L.8/582.
Samsung has subsequently taken NPA and Ministry of Justice to court challenging the FGN directives and NPA’s right to have cancelled its irregular and purported lease. The purported lease to Samsung currently stands terminated.
From the FGN’s investigation into Samsung’s false claim of investment, extensive evidence was gathered, including the fact that there was no capital importation into Nigeria by Samsung. FGN concluded in March 2019 that Samsung is a contractor to Total not an investor. Samsung built the Shipyard in LADOL in its capacity as a contractor and was fully compensated through USD 3.2 billion contract for the work.
Leaving no doubt that the construction and purchase of equipment for the Shipyard in LADOL was funded by FGN. Samsung should stop falsely claiming to be an investor, because Samsung is a contractor and not an investor and the USD 214 million spent on the LADOL Shipyard is the investment of the NNPC and the Nigerian Government. The issue of the USD 214 million is a matter between the Government and Samsung. The commercial issues between LADOL and Samsung will be settled through the ongoing arbitrations and court cases.”
She concluded that “Over the years, Samsung has systematically used all the resources at its disposal and several Nigerian agents to take from LADOL’s shares by moving LADOL from 80% ownership to 30%, through a settlement agreement Samsung procured by falsely claiming that they would invest privately in the joint venture. Similarly, Samsung is making several attempts to take LADOL’s leased land and its Free Zone.
As that has failed, Samsung has now created an illegal access into the Free Zone and barricaded the Yard, which is guarded by police to keep LADOL out. Samsung is doing all it can to take the remaining 30% LADOL owns of the joint venture. Therefore, its failed attempt to steal LADOL’s lease has turned into frustration and outright campaign of calumny aimed at destroying LADOL – a small and law-abiding Nigerian company, without whom Samsung would not have won the Egina project.
Despite this fact, LADOL is willing to abide with commercial terms that will see the Yard used for upcoming projects in the national interest and generate employment for Nigerians. This is in line with the vision of the NCDMB, which years before the Egina project, earmarked five local content facilities for upgrade as part of the project, one of which is the Shipyard in LADOL.”