Nigerian presidential spokesman Bayo Onanuga on Thursday accused a Chinese company called Zhongshan Fucheng Industrial Investment Co. of using “unorthodox means” and “subterfuge” to seize Nigerian government property abroad, including aircraft belonging to the presidential office.
Zhongshan says Nigeria owes it millions of dollars for a never-completed construction project.
Zhongshan signed a contract with Nigeria’s southwestern Ogun State in 2007 to develop a 10,000-hectare industrial park known as the Ogun Free Trade Zone (OGFTZ). Zhongshan acquired the rights to a substantial parcel of land in the OGFTZ in 2010 and created a Nigerian corporate entity to manage the project in 2011.
The deal went south and was terminated by Nigeria in 2015. The details of what went wrong are hotly disputed between the two parties. Zhongshan claims its Nigerian entity spent years building infrastructure in the park, including roads, sewers, and power, plus extensive marketing to persuade several companies to build factories in the OGFTZ.
Nigeria, on the other hand, angrily claimed Zhongshan did little more in the span of five years than building a fence around part of the industrial park. Ogun State refused to pay the compensation demanded by Zhongshan for the work completed to date.
Zhongshan executives claimed the Nigerian government used strong-arm tactics to drive it out of the country, including sending the police to harass company personnel and threaten them with prison time. Chinese managers said their immigration papers were improperly nullified, preventing them from working in Nigeria. One senior Zhongshan manager claimed he was “arrested at gunpoint” and held by the police for ten days, during which time he was beaten and deprived of food and water.
Zhongshan and its Nigerian subsidiary, Zhongfu, initiated arbitration proceedings in international court against Nigeria in 2018. Several other companies from various countries have filed similar charges against Nigeria, which does not have a good track record of winning arbitration battles.
Nigeria lost this one, too, as an arbitration panel in London ordered the Nigerian government to pay $70 million in damages to Zhongshan, an amount later increased to $81 million as Nigeria refused to pay and interest accumulated on the debt.
A British judge subsequently wrote an enforcement order allowing Zhongshan to seize two properties owned by Nigeria in Liverpool, valued at several million dollars apiece.
French courts issued orders enabling Zhongshan to seize Nigerian government assets in France in March and August, and on Friday a judge cleared the Chinese company to take possession of three Nigerian government jets currently undergoing maintenance in France.
The three planes are a Dassault Falcon 7X, a large business jet that fetches about $18 million on the used bizjet market; a Boeing 737-7N6/BBJ, a somewhat larger plane; and a huge Airbus A330-243 passenger jet, which belongs to the office of Nigerian President Bola Tinubu.
Outraged Nigerian presidential spokesman Bayo Onanuga insisted Zhongshan had no right to appropriate the planes. According to Onanuga, Zhongshan’s contract was with Ogun State, not the Nigerian federal government, and Nigerian government assets should be “protected by diplomatic immunity.”
British courts rejected Nigeria’s claim of state immunity when its properties in Liverpool were seized.
“The case in which Zhongshan is trying to use every unorthodox means to strip our offshore assets is between the company and the Ogun state government,” he said.
Onanuga claimed the Chinese company was using unethical tactics to grab Nigerian property while Ogun State was making efforts to “reach an amicable resolution on the matter.”
“This arm-twisting tactic by the Chinese company is the latest in a long list of failed moves to attach Nigerian government-owned assets in foreign jurisdictions,” he said.
Onanuga accused Chinese companies of sending “unscrupulous and questionable individuals” to pose as investors “with the sole objective of undercutting and scamming governments in Africa.”
“We want to assure Nigerians that the federal government is working with the Ogun state government to discharge this frivolous order in Paris immediately,” he said.
Zhongshan on Friday announced it would lift the seizure of the Airbus A330 as a “gesture of goodwill” to the Nigerian government, and to demonstrate that it has “consistently sought to act reasonably and fairly in the course of a legal dispute.”
“Zhongshan remains committed to talks with representatives of the Federal Government of Nigeria, this time serious and substantive on both sides, with a view to reaching a reasonable compromise settlement rapidly,” the company said.