R1bn PetroSA spending questioned – report

2013-04-26 10:59

Questions have been raised about the suspected spending of about R1 billion atQuestions have been raised about the suspected spending of about R1 billion at PetroSA.

The parastatal’s top management allegedly authorised about R200 million in irregular payments, the weekly Mail & Guardian reported today.

Former chief financial officer Rain Zihlangu reportedly submitted three affidavits to the police in November, asking for an investigation into the spending.

In an affidavit, he reportedly said: “Having been a board member of PetroSA since 2006, I had never encountered such blatant abuse of public funds and the flagrant flouting of all procurement policies as was done by Mr [Yekani] Tenza whilst he was the acting CEO of PetroSA.”

According to the newspaper, potential liabilities amounting to R800 million had raised further questions about financial management during Tenza’s tenure, which ended in May.

He and PetroSA’s new oil and gas ventures head Everton September reportedly negotiated its acquisition of crude oil acreage in Ghana “in reverse”, leading to $20 million (about R162 million) extra expenditure.

After the deal was finalised, Joburg lawyer George Sabelo was paid a “success fee” of R11.4 million, a large portion of which was transferred to an unidentified third party, raising suspicions of corrupt dealings.

In a separate deal, PetroSA reportedly overspent on a secret deal to buy petrol stations nationwide.

Tenza allegedly fired transaction adviser HSBC, leading to a cancellation fee of R19 million, replacing it with the local firm, Mahloele’s Harith Fund Managers.

Harith was reportedly promised at least R371 million on completion of the deal. HSBC’s success fee on the same deal would have been R35 million.

After Tenza left, Harith’s success fee was negotiated down to R187 million.

Yesterday, Hawks spokesperson Captain Paul Ramaloko told the Mail & Guardian an investigation involving PetroSA was under way.

According to the newspaper, PetroSA said that in its business environment “swift decision making and quick turnaround times were critical“, but “unfortunately, some deviations from our normal procurement processes have occurred”.

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