SAN FRANCISCO, September 15, (THEWILL) – SALOF Industries Nigeria Limited has threatened to drag General Electric (GE) Oil and Gas Incorporated to court over alleged breach of contract in the acquisition of SALOF Refrigeration Companies USA (a designer and manufacturer of small-scale liquefied natural gas technologies).
SALOF Industries Nigeria Limited has also served a notice of its intention to GE Oil and Gas in a letter dated July 3, 2013 to GE Oil and Gas through its lawyer, Chief Mike Ozekhome (SAN).
The company also gave GE Oil and Gas a 14-day ultimatum to initiate processes of mitigating the loss that SALOF Industries Nigeria Limited suffered due to the acquisition.
It will be recalled that SALOF Refrigeration Companies USA had on May 15, 2008 entered into an agreement of commission payment of 20 percent to SALOF Industries Nigeria Limited on all orders originating from Nigeria, Ghana and Uganda.
On October 5, 2010, the USA-based companies sent an addendum, to the signed commission agreement, stating that it would pay five percent to the Nigerian company on orders originating from other companies while the 20 percent commission payment would apply on orders originating from SALOF Nigeria.
The notice to explore legal options was therefore sequel to the Managing Director of SALOF Refrigeration Companies USA, Mr George Salof’s May 6, 2013 communication to the Managing Director of SALOF Industries Nigeria Limited, Mr Oghenekaro Jockey, that GE Oil and Gas had entered into an agreement to acquire SALOF Refrigeration Company Incorporated.
He was quoted to have said the acquisition would give GE Oil and Gas access to SALOF small scale LNG and Co2 processing technologies and fabrication expertise, and maintained that SALOF would continue to operate as a separate business.
But the management of SALOF Industries Nigeria Limited, which signed an agreement as a sole agent of the Schertz, Texas based companies on July 29, 2007, were shocked when they received a letter dated June 11, 2013 from GE Oil and Gas informing it of the termination of its commission agreement and affiliation with SALOF Refrigeration Companies USA.
The letter, which was addressed to Mr EJ Agbonayinma, Mr Oghenekaro Jockey and others (all directors of SALOF Industries Nigeria Limited) was signed by Global Sales and Commercial Leader/SALOF Integration, Erik Barton.
In the notice of intention to drag GE Oil and Gas to court, SALOF Industries Nigeria Limited, a subsidiary of SALOF Companies USA, said “prior to the acquisition of SALOF by GE Oil and Gas, SALOF Nigeria had embarked on the design of a turnkey project with the support of SALOF USA in partnership with UDDIPCO for Chevron Nigeria. SALOF Nigeria and SALOF USA had invested remarkable efforts to ensure the success of this project.
“It was to our dismay to realize that SALOF USA disengaged from further participation in the said project without prior notice to SALOF Nigeria for proper communiqué to Chevron Nigeria. We went on to express his disappointment in a mail to Mr George Salof on the 12th of June 2013.
“It is worthy of note that tremendous resources, including but not limited to financial and human resources have been invested into marketing the SALOF identity in the Nigeria market by SALOF Nigeria.
“Such efforts resulted in the authorisation by the then Minister of Petroleum to the NNPC for the introduction of SALOF Nigeria to Addax Petroleum Nigeria limited, Shell Petroleum Development Company Limited, Nigerian Agip Oil Company Limited, Mobil Producing Nigeria Limited, Chevron Nigeria Limited and Pan Ocean Oil Corporation,” SALOF said in the letter.
The 14-day ultimatum has since lapsed without positive response from GE Oil and Gas and Ozekhome, who was recently released by kidnappers , may just have to proceed with the plan to drag GE Oil and Gas to court for not treating SALOF Nigeria as part of the assets and liabilities of SALOF USA.