Energy minister orders forensic probe into dodgy sale of strategic fuels

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Energy minister orders forensic probe into dodgy sale of strategic fuels

Bianca Capazorio | 2017-05-30 14:50:36.0

Minister of Energy Mmamoloko Kubayi

Image by: Trevor Samson

Energy minister Mmamoloko Kubayi has instituted a forensic probe into the mysterious sale of South Africa’s fuel stocks last year and has also hinted that criminal charges may follow.

Kubayi was presenting the findings of an preliminary probe into controversial sale of the fuel stock to Parliament’s portfolio committee on energy.

She said she could not make the report public as it could “contaminate” any criminal case.

Kubayi confirmed during her first week in office that millions of barrels of South Africa’s fuel reserves had been sold off at bargain basement prices under questionable circumstances‚ costing the country billions of rand.

The transaction took place during the tenure of Kubayi’s predecessor‚ Tina Joemat-Pettersson.

But she assured the committee that the oil was still in South African tanks and had not yet been lifted by the buyers‚ as her department was trying to map out the way forward.

She said a forensic investigation was under way and that they were currently weighing up their legal options around the validity of the sale contracts.

The money meanwhile‚ had been moved into a dollar-specific account to address currency fluctuations.

She said the report “gives an indication of one particular individual” who had been CEO‚ COO and general counsel at the same time‚ creating a situation where there were few “checks and balances”.

Godfrey Moagi‚ acting group CEO for the Central Energy Fund‚ said the investigation had found the sale of the stocks to three companies – Vitol (3 million barrels)‚ Talevaras (4 million) and Venus Ray Trading (3 million barrels) between 15 December 2015 and January 2016‚ at prices of $26 and $30 per barrel – had broken procurement regulations as it had not been not okayed by either of the boards of the Strategic Fuel Fund or the Central Energy Fund.

The SFF board had only become aware of the sale “after events” while the CEF board only became aware in May last year when $280 million was discovered in their accounts.

The then CEO of the Strategic Fuel Fund also wrote directly to Joemat-Pettersson for approval instead of acquiring board approval first. Joemat-Pettersson assured Parliament last May that the stocks had not been sold‚ merely rotated to get fresh crude oil into the country’s reserves.

The EFF’s Mzingisi Dlamini and the DA’s Gordan Mackay questioned whether Joemat-Petterson had misled parliament.

But Kubayi said “give her the benefit of the doubt” as it had only become clear after this investigation that the oil had been sold and not rotated.

Mackay however insisted that “something does not add up”.

Dlamini said that “the country shuts down if we don’t have fuel stock”.

ANC MP Risimati Mavunda applauded Kubayi for being “transparent‚ open and frank” but expressed concern that proper procedures were not followed in the sale.

TMG Digital/TimesLIVE



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