Following an appeal for intervention from an indigenous company, Cona Engineering and Technical Services, the Nigerian Content Development and Monitoring Board (NCDMB) has confirmed investigations of a United Arab Emirates (UAE) company, John Crane Middle East FZE.
The investigation is to ascertain claims of Nigeria’s Cona Engineering that John Crane had serially breached its contractual obligations in clear affront against the local content law of Nigeria.
Documents sighted by newsmen include a complaint letter from Cona Engineering to NCDMB dated 24 June 2024 in which it alleged that the UAE firm was in breach of Nigeria local content law when it unilaterally terminated extant contract between it and Cona, a contract that represents the local content component of John Crane’s business transactions in Nigeria.
In its response to the complaint, the NCDMB through an acknowledgement letter dated 17th October 2024 and signed by its Executive Secretary, Mr Felix Omatsola Ogbe, said the “Board has commenced investigations into the issues raised in your complaint. You will be duly informed of the outcome as soon as the investigations are completed.”
When contacted, the Founder of Cona Engineering, Mr. Cyril Amako, said the initial agreement between his company and John Crane was executed in 1996, adding: “I never suspected that John Crane will breach the contract, primarily because John Crane is a multinational company with their head office in the United States. Moreover, John Crane is a member of the Smiths Group which is a highly reputable establishment. However, we became uncomfortable and suspicious when they coerced us to start dealing with their office in Dubai instead of South Africa which we related with for several years.”
Amako said: “In the agreement, the Smiths Group emphasized on their respect for the laws of any country where they operate which includes the laws of the Federal Republic of Nigeria. Violation of our contractual agreement started as far back as year 2010 when they started boycotting us and supplied directly to NLNG, NAFCON (now Notore), Eleme Petrochemical company (now Indorama) etc. We reminded them several times in writing about the local content laws of Nigeria but they ignored us.
“In one of the meetings we had with them and with NLNG in attendance, NLNG emphasized to them that they will not accept any direct dealings with John Crane because of the local content laws of Nigeria.”
He said he expects the Nigerian government to protect Cona Engineering as a fully indigenous company which ought to be protected by the laws of the country, adding that the matter was officially reported to the NCDMB since year 2024 and that they are still awaiting their response.
According to him, before they resorted to seeking legal redress, they wrote John Crane for account reconciliation but they declined.
“We also engaged the services of a multinational auditing firm, KPMG to reconcile the account between Cona and John Crane. Consequently, KPMG wrote John Crane formally informing them of our retaining them for account reconciliation. Again, John Crane declined and never responded. At this point, Cona had no other option than to approach the court for remedies.
“KPMG contacted them and solicited their cooperation but John Crane declined. The $10million we demanded for in our suit against them is captured from our records of transaction with them for almost three decades including money Cona lost due to their direct supplies to our Nigerian clients,” he explained.
He continued: “We feel exploited and used by John Crane to firmly establish, entrench, consolidate, and propagate their long-term business interest in Nigeria. Curiously, the company they chose to replace us with as their Nigerian agent is registered as a local Nigerian company that has majority shareholding by Nigerian-Lebanese nationals.
“It is equally important to note that the Managing Director of John Crane Dubai as at the date of our agreement termination is a Lebanese national as well,” he said.