PIAC Demands Probe into $7.5m GNPC Property; 34m Oil Revenue Slump

The Public Interest and Accountability Committee (PIAC) is demanding answers in connection with the purchase of a $7.5 million property at Takoradi by the Ghana National Petroleum Corporation (GNPC) as well as the state oil firm’s under-pricing of crude from the TEN oil fields which led to the loss of some $34 million.

On the property issue, the CEO of GNPC, Dr Kofi Kodua Sarpong, said he did not benefit from a dollar in the purchase of the US$7.5million property from private firm Global Haulage, his former employer.

Prior to his appointment as GNPC CEO, Dr Sarpong had worked as the Group CEO of Global Haulage.

His relation with the two entities has raised questions about whether or not he influenced GNPC to do business with his former employer.

In an interview with Accra-based Joy FM on Monday, 28 August 2018, however, Dr Sarpong insisted he did not play any active role in the transaction.

“As you may be aware, GNPC is moving parts of its operations to the Western Region, we already started the GNPC Foundation, it’s been working there for well over a year now from a rented premises; we are now going to put the official GNPC complex in Takoradi and then moving the staff there, we thought we should procure accommodation.

“There were lots of people trying to sell each of one unit here, two units here to us, and then we had this property, which I was aware of because I had been connected to Global Haulage. I must tell you that there are all valuation reports by the relevant agencies, it went through the Board of Directors, sub-committee and recommended to the board,” he said.

He continued: “Because of my experience, knowing that I have been related to Global Haulage, I never took part in the negotiations and even the vendors themselves will tell you, it was very difficult getting me to help them with the transaction.

“After it had been approved, properly by the board, they were demanding their payment, we were going to Christmas, they needed their money for whatever reason and the lawyer who had the documentation had taken some leave and we couldn’t reach her”.

He explained further: “As Chief Executive, what I said is that, go ahead and pay because I executed the sale and purchase agreement as Chief Executive, all the documentation are there, you can see the date that I executed. Now because the lady wasn’t there for us to have access to the documentation, didn’t mean that we shouldn’t pay them.”

Dr Sarpong was of the view that: “As an accountant, we know that we can do pre-auditing and post-auditing if you are sure of the transaction, post-auditing and pre-auditing should give you the same results, so, I said go ahead and pay. But you noticed that from the document I have sighted, which came from the GNPC, its written there, 2 million paid on such and such a day, I’m not saying that all the 7 point something million was not paid on one day,… whoever did that documentation, you notice normally after my approval, I don’t see these things again, it was staggered, they paid to them, I don’t see anything wrong with this at all.”

“We are in preparation, we have moved, we are moving and we are going to move into the Western Region and I find it quite strange that this document, those who published, don’t even contact the Chief Executive because if I didn’t have courage about the transaction, I wouldn’t go in and say that I have taken this unusual step, unusual step in the sense that normally, I want the pre-auditing and those things to go on, but my staff not being available didn’t mean that the vendor should suffer if they needed some of the money, so that is the background to it and I can confirm that me, personally was not deeply involved, because I have ever acted as the Group Chief Executive for Global Haulage before the oldman [Alhaji Adamu] died.

“So, I must be honest, yes, if it is the most suitable property there, there was no reason why we shouldn’t buy it…and it is not something that was done nicodemously. It was done openly, the whole board, nobody on the board can tell me, he wasn’t aware, from the chairman through to the ordinary members, everybody was involved and even GNPC staff itself involved in property cannot say they were not aware,” Dr Sarpong added.

On this particular concern, PIAC, in a statement said the “responses and documentation provided by GNPC will enable PIAC to come to an informed position on the matter” … pursuant to its mandate to “conduct independent assessment of the management and use of petroleum revenues” as well as “assist parliament and the executive in the oversight and performance of related functions, respectively”.

With the under-pricing of crude by GNPC, PIAC said: “Given that GNPC appears to contest this view, as evident in the corporation’s response to the minister’s directive, PIAC strongly recommends the establishment of an independent panel of experts with key representation from GNPC, MoF, BoG, PC, GRA, and PIAC, to review the TEN crude oil marketing policy, and to settle the matter.”

“It is important to recognise that even a dollar price differential for a barrel of crude, can amount to substantial losses. This is because a parcel of crude from our oil fields is usually around a million barrels. A dollar mark-down done fraudulently can, therefore, lead to a loss of a million dollars per lifting,” the statement added.