Nigeria's leading finance and market intelligence news report.

Why Samsung Wants to Destroy LADOL

Response to the Advert – Titled:- “True position on investment in Nigeria and challenges faced from LADOL” issued by Samsung in the Guardian (6Sep20), This Day (8Sep20), The Nation (8Sep20), Nigerian Tribune (9Sep20) and Daily Trust (10Sep20) newspapers.

LADOL Group (including GRML) wish to put further facts before the public to rebut Samsung Heavy Industries Nigeria Limited’s (Samsung’s) ongoing attempts to thwart Federal Government’s Directives, and smear LADOL’s reputation with falsehoods. Samsung’s advertorial was confused and contradictory, as they struggled to make the facts fit their false
narratives. Please see below the facts, from which the public may draw their own conclusions:

LADOL’s Development Began in 2001 – 12 Years Before it Invited Samsung into Its Zone

1. LADOL Free Zone’s development began in 2001 when a group of indigenous Nigerians put a masterplan together to build an industrial Free Zone for Nigeria.

2. Investment began on the ground in 2004 and every year since then the Nigerian stakeholders, including many private indigenous Nigerian families and institutions have invested heavily in and built LADOL to what it is today.

Read also: True Position on Investment in Nigeria and challenges faced from LADOL.

3. By 2012 the Zone had been transformed from a disused swamp into a fully operational 24 / 7 Free Zone and logistics base – with quayside, warehouses, accommodation, power, offices etc… LADOL had also carried out one of the largest Rig repairs ever done in West Africa.

4. In 2010 Samsung approached LADOL to help them fulfil 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 them with a winning local content plan. Which Samsung submitted as part of its tender to Total.

5. In 2013 Samsung won a USD 3.2 billion contract from Total, making them the contractor for the Engineering, Procurement and Construction (EPC) of the Egina FPSO. LADOL then invited Samsung into its Free Zone to form a joint venture (JV) company to fulfil the local content requirements of that same Egina FPSO contract. The contract signed between Total and Samsung clearly stated in writing that the JV company between LADOL and Samsung was to be owned 80% by LADOL, 20% by Samsung. Further 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.

6. 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 sublessee 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 Nigerian Content Development Board, a court order of status quo from the Federal High Court FHC/L/CS/1263/2018 and pending arbitrations in London – which were 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. In short this land was developed by LADOL long before Samsung entered the Zone as the joint venture partner to LADOL and a contractor to Total in 2013. 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.

7. 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.

8. Samsung attempted to steal land which LADOL has been developing for over a decade before Samsung was invited into it, to fulfil local content. Samsung’s determination to destroy LADOL Free Zone can in no way be justified by their claim of being investors. Even if this claim was not false, LADOL’s stakeholders have spent twenty years developing the Free Zone and investing in the area under their head lease with NPA, to attract investors and tenants. For any tenant / client of the Free Zone to take advantage of LADOL’s long-term investments, strong local content contributions and credibility in the market to win business and then try to usurp LADOL’s lease and its business is the height of betrayal and ingratitude.

Ongoing Fraud Case Against Samsung Heavy Industries Nigeria
1. In 2018 LADOL learnt, through a National Assembly investigation, that Samsung had collected USD 214 million from Total Upstream Nigeria Limited to build the Shipyard in LADOL. It then became apparent that Samsung had mislead LADOL and instead of investing their own money they had used Nigeria’s money to build the Shipyard as a contractor.

2. LADOL’s legal advisors determined that Samsung’s actions were tantamount to fraud against Nigeria and against LADOL and filed a court action at the Federal High Court to seek redress.

3. The Federal Government launched its own investigation into Samsung’s false claim of investment and gathered extensive evidence, 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 Samsung was fully compensated through its USD 3.2 billion contract for this scope of work.

4. On 9th February 2019 Samsung wrote to LADOL and confessed that it had only spent USD 214 million building the shipyard in LADOL. That is the exact amount allocated for the Yard development in the Total contract. Samsung has collected over USD 3.2 billion from Total so far under this contract – every penny of which will be reimbursed by FGN. Leaving no doubt that the construction and purchase of equipment for the Shipyard in LADOL was funded by FGN.

LADOL’s position is that, as per the FGN directives, Samsung should stop falsely claiming to
be an investor, because Samsung is a contractor and not an investor. LADOL has consistently
stated in writing that the USD 214 million spent on the Shipyard is the investment of the NNPC
and the Nigerian Government. In the settlement agreement mediated by NCDMB between
Samsung and LADOL, LADOL restated this and it was agreed that 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

Over the years Samsung has systematically used all the resources at its disposal and several Nigerian agents to take from LADOL. First taking LADOL’s shares, moving LADOL from 80% owner to 30%, through a settlement agreement Samsung procured by pressuring LADOL and falsely claiming that they would invest privately in the joint venture. Second making several attempts to take LADOL’s leased land. Third attempting to take LADOL’s 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 has no project in Nigeria right now, the lack of activity in the Yard reduces their costs in Nigeria and allows them to focus on their busy Yard in South Korea. Meanwhile Samsung is doing all it can to take the remaining 30% LADOL owns of the joint venture.

Samsung’s failed attempt to steal LADOL’s lease has frustrated them into a campaign of calumny aimed at destroying LADOL, a small Nigerian company, without whom Samsung would not have won the Egina project. Despite this fact, LADOL as a Nigerian company 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 Nigerian Content Development Board, 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. LADOL and its stakeholders are compliant, law abiding and committed to their vision and mission – which will continue to benefit all its stakeholders. LADOL will defend its rights in the courts of law and the ongoing arbitrations in London. In addition, LADOL will continue to set the record straight by presenting the facts to the public.

Whatsapp mobile

Get real time updates directly on you device, subscribe now.