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Former Ogun State governor who terminated a Chinese firm’s contract that has now put Nigeria in an embarrassing situation has defended his decision.
lbikunle Amosun, who governed Ogun between 2011 and 2019, explained that his government acted due to a dispute between two Chinese firms over control of the state’s free trade zone.
Mr Amosun’s explanation on Saturday came a day after the Minister of Foreign Affairs, Yusuf Tuggar, warned state governments against signing international agreements without due consultation with the federal government.
It was reported that a Chinese firm, Zhongshan Fucheng Industrial Investment Co Limited, obtained a court order from a French court to seize three of Nigeria’s presidential jets after the Ogun State Government allegedly breached a business contract in 2016.
The firm has agreed to release one of the planes but is, based on the court order, holding on to the other two as well as some other Nigerian properties it secured through another British court order based on the same matter.
In his first reaction since the scandal broke, Mr Amosun said his government intervened due to the dispute between Zhongfu International Investment FXE and another Chinese firm, China Africa Investment FXE.
In a statement, titled, ‘Presidential Jets Seizure: Zhongfu Firm Is An Impostor…,’ Mr Amosun explained that when he assumed office in 2011, the two Chinese companies laid claims to management rights over the Ogun Guangdong Free Trade Zone (OGFTZ).
He said the rivalry between the companies soon worsened and threatened public peace and safety within the zone and neighbouring communities.
“There were claims and counter claims as to who between the two was the lawful representative of the original joint venturer, Guangdong Province, China and consequentially who had the right to manage the Zone,” he said.
According to the former governor, Zhongfu International was appointed as Interim Zone Managers based on damaging information it gave about China Africa Investment FXE.
“Zhongfu International Investment FXE, pretending to be a concerned and genuine tenant and zone stakeholder, volunteered very damaging and destructive information about the official representatives of Guangdong Province, the Joint Venturer and lawful Zone Managers, China Africa Investment FXE and subsequently requested to be appointed as Interim Zone Managers.
“Based on the information at the disposal of the Government at the time, Zhongfu International Investment FXE was on 15/03/2012 appointed as Interim Zone Manager pending further evaluation. The whole idea was to ensure that someone was in charge and thereby prevent unwholesome and untoward development in the zone pending the completion of our fact-finding exercise,” he stated.
Mr Amosun said his government later discovered “that the information and claims by Zhongfu International Investment FXE against China Africa Investment FXE were tissues of lies.”
“Unknown to Ogun Government at the time, Zhongfu International Investment FXE merely sought to de-market China Africa Investment FXE and to surreptitiously covert the state-owned assets of Guangdong Province in China together with the zone ownership and management rights of their business rival,” he added.
He said the Chinese government, through its Diplomatic Note 1601 dated 11 March 2016, clarified to the Ogun State Government that China Africa Investment FXE was the rightful investor.
He added that after due consultation with the State Security Services and the supervising agency, NEPZA, the Ogun government served Zhongfu International with a formal termination notice dated 27 May 2016.
The former governor said the termination of Zhongfu International’s contract as the Interim Zone Managers of the Ogun Guangdong Free Trade Zone (OGFTZ) led to a series of litigations and petitions.
“We successfully defended our actions at all levels before these organs of government, and they all agreed with our position. Shortly after, our administration left office in May 2019,” Mr Amosun stated.
He urged the federal government not to give in to the demands of Zhongfu International, adding that “it is concerning that a purely business dispute between two Chinese nationals and corporations have now degenerated into an unlawful attempt to appropriate Nigeria’s sovereign assets.”
Tuggar’s Reaction
While speaking with reporters at the Malabo International Airport, in Equatorial Guinea, foreign affairs minister Tuggar insisted that sub-national governments should always be careful when entering international agreements.
He assured that his ministry and the Attorney General of the Federation were working to resolve the issue legally and diplomatically.
“Yes, the Attorney General and I are working on it, both diplomatically and then from the legal perspective as well, to ensure that this issue is resolved,” he said.
The minister noted that the federal government was unaware of the negotiation process and the agreement the Ogun State Government made with the Chinese firm, which has now resulted in a lawsuit.
Speaking further, he explained that when sub-national actors like state governments embark on international negotiations without the expertise of relevant ministries, they make the federal government vulnerable to unnecessary litigation.
“This is part of the problem when sub national actors like state governments take it upon themselves to go into agreements, go into international arrangements, without recourse to the Ministry of Foreign Affairs, without recourse to the federal government, and then when it goes awry, we are left with the problem to deal with.
“That is why it’s always important that such arrangements be registered with the mission there, with the embassy, with the Ministry of Foreign Affairs, and with the federal government. This is something that Ogun State, under a different administration, not this governor, entered into that we’re not aware of.
All we know is that they’re going after Nigerian assets.
“That’s why foreign or international negotiations are not the purview of subnational actors. You should always have those that are experienced in negotiating this sort of agreement on your team,” he stated.
The Contract
In 2010, the Ogun State Government and Zhongshan Fucheng Industrial Investment Co Limited went into a contractual agreement to develop a free-trade zone in the state.
However, the Ogun State Government terminated the agreement in 2016 and appointed another manager for the free trade zone.
This prompted the Chinese firm to launch an investment treaty arbitration against Nigeria, citing the bilateral investment treaty between the People’s Republic of China and Nigeria.
In 2021, an independent arbitral tribunal awarded Zhongshan $55,675,000 in addition to an interest of $9.4 million and costs of £2,864,445 payable by Nigeria to Zhongshan.
It is this sum that the Chinese firm wants paid and that has led to the French and British court orders.
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