LADOL Denies Samsung Made $300m FDI in Nigeria

ABIOLA Seun |

Lagos Deep Offshore Logistics Base (LADOL) has accused its local content partner in the fabrication and integration of the $3.1billion Egina FPSO and the parent company of SHI MCI FZE, Samsung Heavy Industries Nigeria (SHIN) Limited, of misrepresentation in its claim that it made a foreign direct investment of $300 million into Nigeria during the construction of the fabrication and integration yard in LADOL Free Zone.

A statement by its counsel, Fidelis Oditah (SAN), stated that contrary to Samsung claims, SHI was paid as a contractor to build the fabrication and integration facility at LADOL as a part of the Egina FPSO package contract.

Samsung, he insisted, is a contractor not an investor in respect of the facility, adding that it invested nothing in the construction of the yard.

According to him, “In summary, Samsung committed at least three frauds and misrepresentations in connection with the June 2014 Settlement Agreement in order to induce LADOL to surrender its 80 per cent equity ownership of SHI MCI FZE and the fabrication and integration facility: The first is the fraud by which Samsung took LADOL’s equity in SHI MCI FZE and gave itself 70 per cent ownership of a fabrication and integration facility which was approved by the FGN and funded by Total as the poster child of Nigeria’s local content policy in respect of the Egina FPSO project.

“Samsung thus misappropriated a local content facility and claims it as its own facility that with which it could do as it pleases. This is a massive fraud against LADOL and Nigeria by depriving LADOL and Nigeria of a capacity development project which they had planned to use to benefit Nigeria by attracting other investments and creating at least 50,000 direct and indirect jobs. Similarly, by completely excluding LADOL from the facility, Samsung ensured that there was no technology transfer to Nigerians.”

He added, “The second misrepresentation is that there was no US$214million provision in the Egina FPSO contract allocated to the construction of the new fabrication and integration facility at LADOL, with which fraud and misrepresentation it procured LADOL to surrender its 80 per cent ownership of SHI MCI FZE, the fabrication and integration facility owning vehicle.”

Oditah stressed that there are three aspects to the dispute between Samsung and LADOL. “The first is the ownership of SHI MCI FZE, which is a joint venture between LADOL and Samsung formed to perform the Egina FPSO EPC contract between Samsung and Total Upstream Nigeria Limited (Total).

“The second aspect is SHI MCI FZE’s sublease agreement with a LADOL affiliate, Global Resources Management Limited (GRML).

“The third is SHI MCI’s operating licence as a free zone enterprise within the LADOL free zone.

“Samsung, on the other hand, has remained consistent in its assertion of ownership of the fabrication and integration facility on the basis that it had singlehandedly funded the construction of the facility, which it claims to be US$300 million, “he said.

However, Samsung has remained consistent in its assertion of ownership of the fabrication and integration facility on the basis that it had singlehandedly funded the construction of the facility, which it claims to be US$300 million.

It 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.

The company maintained 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 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“, it stated.

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.