In a fruitless effort to tarnish the hard-earned reputation of the suspended Managing Director of the
However, the sponsors of the falsehood failed because the facts relating to the dispute have been in the news for over the past couple of years.
As an investment advisor with special interest in the Gulf of
While it is understood that most of the issues between Samsung and LADOL are pending before Arbitration in the
The entire saga arose from
Most of us, who influence investment decisions had welcomed this decision with enthusiasm, believing that
Indeed, there is no doubt that Samsung could have elected to make any other African country its primary base in
Investments, whether national or foreign, require a conducive environment which is essentially based on the rule of law and respect for contracts.
Samsung was engaged by
It was evident from publicly available information that LADOL was not a party to the EPCI Contract, neither was it a partner to the
It was gathered that the joint venture arrangement between Samsung and LADOL arose as a result of ship builder's commitment to fabricate and integrate certain portions of the FPSO in
In furtherance of this,
SHIN was said to have assessed other sites in
It was understood that when SHIN requested for a lease of land in the zone for the development of the fabrication and integration yard, LADOL indicated its interest in participating in a joint venture with Samsung.
This joint venture company would execute a subcontract for the local fabrication and integration of certain topsides of the Egina FPSO.
In furtherance of this, SHI-MCI FZE was jointly set up by Samsung and LADOL.
Also from the information available in the press, when Samsung entered the joint venture with LADOL, the location for the construction of the fabrication and integration facilities was a 12,100 square metres of swamp with no development whatsoever thereon.
It was also gathered from both parties that the initial rent agreed for the 12,100 square meters in 2013 was
However, by
Meanwhile, LADOL pays less than
When NPA under Bala-Usman discovered that LADOL charged such exorbitant fees without prior due process for an approval from NPA, it sanctioned LADOL for violating the terms and conditions in the Head-lease Agreement between NPA and LADOL.
It was this sanction that led to the Presidential directive, which was even overtaken by court orders, and which was referred to in Sahara Reporters' report
Again, parties had agreed that the equity holding shall be 70 per cent SAMSUNG and 30 per cent MCI (LADOL affiliate).
The shareholding restructuring was to reflect the financial capacity of each party to meet its equity funding obligation. The 30 per cent allocated to LADOL was procured by advanced payment of
So, it was the
Interestingly, LADOL has never disputed this fact in all its media releases.
Further to this, information at the public domain, which have not been disputed also showed that Samsung invested: (a)
In addition to these investments, other ancillary costs relating to the development brought the total investments to excess of
From this foregoing, it is evident that Samsung should be respected as a genuine investor in
Regarding the intervention of the NPA in the dispute over the land between Samsung and LADOL, it is necessary to clarify that this issue stems from LADOL's failure to comply with the terms and conditions of the Head-lease it entered into with NPA in 2006.
When the joint venture between Samsung and LADOL was set up, LADOL granted a sublease to the joint venture entity (SHI-MCI) obviously without NPA's prior approval.
However, the NPA/LADOL lease had a fundamental condition that any subletting to anyone without NPA's prior approval would provide a basis for an automatic termination and consequently the sublease to the joint venture enterprise.
This was the major identified risk because such termination would directly impact multi-million dollar investments of Samsung.
It was gathered that despite several requests by Samsung to LADOL over a four year period to seek NPA's approval, LADOL refused to obtain the approval.
In its letter terminating LADOL's lease, the NPA alleged that the refusal by LADOL to obtain its consent was because LADOL did not want NPA to be aware that the rent it collected from Samsung was
Media reports also indicated that in 2018 a dispute occurred between LADOL and Samsung, following the attempt by LADOL to utilise its conflicting and monopolistic positions to strangulate Samsung's operations by (a) refusing to issue an operating licence for continued operation of the Joint Venture; (b) terminating the sublease to the Joint venture and directing Samsung to vacate the multi-million dollar investments within 90 days; and (c) ceasing to provide services to Samsung at the critical time for the Egina FPSO project. It took court orders and also intervention of an international oil company (IOC) which is the owner of the FPSO and federal government's agencies for LADOL to allow the completion of the Egina FPSO project.
Notwithstanding this, upon sail away to the oil field of the FPSO, LADOL continued its frustration of the operation and use of the facilities. In 2019, due to LADOL's continued breach of its lease agreement by not obtaining the consent of NPA for the subletting and procuring an extension of its lease by misrepresentation, NPA terminated LADOL's lease.
NPA subsequently leased the 11.2 hectares on which Samsung invested over
It is clear from these resolution steps that the lease from NPA to Samsung does not affect the over 100 hectares remaining land held by LADOL.
It should be noted that in 2018, His Excellency, President
(a) NPA's subsequent discovery in 2019 of material misrepresentation by LADOL as well as material breach of the lease granted to LADOL formed the basis for termination of the LADOL lease in
(b) When LADOL petitioned government authorities, NPA allegedly sought to reverse the lease granted to Samsung, the Korean investor in Suit No. LD/6899GCMW/2020, obtained a court order restraining NPA from taking any steps pursuant to the purported termination of the Samsung lease, including but not limited to peaceful enjoyment of Samsung' rights under the lease or recognising or granting any interest in the demised land to anyone or acting in any manner contrary to the terms of the lease or that is adverse to Samsung's interest under the said lease pending the hearing of the application on notice for interlocutory injunction. The Honourable Court on
(c) Neither the termination of the LADOL lease nor the grant of a direct lease by NPA to Samsung breaches any applicable law nor does it create any unfair disadvantage on a local company.
(d) LADOL had not and did not develop any part of the 11.2 hectares in dispute as it was bare swamp land, which Samsung invested millions of dollars to develop. Indeed LADOL still holds over 100 hectares at same location.
(e) NPA had disclosed that since the commencement of the relationship between SAMSUNG and LADOL in 2013, it is understood that Samsung has paid to LADOL around
(f) It is obvious that the lease granted to Samsung was to potect the significant investments of foreign investor in
(g) NPA's action will go a long way in attracting more foreign investments into
... ... Peters, an investment advisor, writes from
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