Devani charged afresh with theft of oil products
Triton Petroleum Company chairman Yagnesh Devani was on Tuesday charged afresh with the theft of oil products worth Sh1.3 billion belonging to Fortis Bank of Netherlands.
An arrest warrant for the businessman, who has been on the run since the mega oil scandal was exposed two years ago, was issued by chief magistrate Gilbert Mutembei.
The runaway oil dealer is jointly charged with former Kenya Pipeline Company (KPC) chief technician Benedict Mutua, and former Triton Energy Kenya Ltd employee Julius Kyalo.
Mr Mutua and Mr Kyalo were each granted Sh500,000 cash bail after they denied the charges.
They are alleged to have stolen 12,633,239 metric tonnes of oil products valued at $17 million belonging to Fortis Bank from Kipevu Oil Storage Facility (KOSF) in Mombasa.
Mr Mutua is facing a separate charge of abuse of office for releasing the products without the authority and contravening the Collateral Financing Arrangement (CFA) between KPC and Triton Energy. The case will be heard on April 18.
Corruption case
The hearing of a related corruption case against Devani and seven others, among them employees of KPC and Triton will start on Wednesday.
Devani, Mahindra Pathak, Kyalo, Collin Otieno and Triton Petroleum are accused of jointly disposing of 13 million cubic meters of diesel worth Sh32 million without the consent of Emirates National Oil Corporation (Singapore) on September 5, 2008.
KPC’S former employees, Mutua, Peter Mecha, Phanuel Silvano, and Triton are accused of conspiring to defraud a number of petroleum companies by purporting that Triton had diesel ready for sale at the Kipevu storage facility.
In an independent audit the government conducted to unearth the scam, PricewaterhouseCoopers (PwC) said in its report that senior KPC employees in the Operations and Finance departments played a key role in the fraudulent release of petroleum products to Triton.
Major role
PwC investigators said Fortis Bank of France lost 12.6 metric tonnes of petroleum products and Glencore Energy UK Ltd 31.752 metric tonnes.
KPC was accused of acting in breach of CFA by irregularly releasing the products in its custody to Triton.
According to the PwC report, the agreement required KPC to issue acknowledgement letters to the financiers confirming it was holding stocks that they could only release to the marketer upon receipt of an authorisation from the financier.
“KPC failed in its fiduciary responsibilities by not implementing the Collateral Financing Agreement leading to the loss of products,” the PwC audit disclosed.
The report also cited operational lapses at KPC as the major cause of Triton’s ability to draw products that did not belong to it causing distortions that nearly brought down the entire petroleum supply chain.
PwC investigators said KPC played a major role in the scam after its officials admitted to irregular release of an estimated 96,000 tonnes of fuel products in its custody without the consent of lenders.
