Oil siphoning racket cost OiLibya 8.5m litres of fuel

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OiLibya oil
An OiLibya petrol station. PHOTO/COURTESY: one2one.co.ke

Ola Energy, formerly OiLibya, lost 8.5 million litres of fuel between 2012 and 2014 through a fraudulent scheme involving its employees, an audit by auditing firm Deloitte has revealed.

The audit revelation was made last week in an ongoing court case against the company’s former local Manager Paul Mwaponda, who was implicated as having been aware of the oil siphoning scheme during his tenure at the company. Mr. Mwaponda was fired after the racket was unearthed but he moved to court to challenge his dismissal from the oil distributor. The court ultimately awarded him Ksh.9.8 million for unlawful dismissal.

The audit results from Deloitte revealed that OiLibya’s employees at Kenya Pipeline Company (KPC) and KenGen siphoned the fuel through the company’s Nairobi terminal with the full knowledge of the management who did not intervene in any way. The audit report implicated Nairobi Terminal Stocks Accountants who registered forged book entries that OiLibya’s fuel stock had been returned to the storage yet the fuel was loaded to KenGen and carted off.

“It is worth noting that, in my opinion, they painted the picture of general lapses in the management of the respondent’s stocks, and a weak ACCPAC system which could easily be manipulated to the detriment of the company by its own staff under the cover of its management who chaired the committees which were set up to deal with the problem but turned a blind eye for years,” said Justice Onesmus Makau when Mr. Mwaponda’s case was being heard.

This is not the first time that audits by Deloitte have uncovered fraudulent schemes at the company. In March 2015, a forensic audit by Deloitte revealed that the company lost 2.8 million, 3.6 million and 2.1 million litres of Gasoil diesel, Super Petrol and Kerosene respectively from leakages which cost the company millions of shillings in losses.

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