PetroSA spending a R1 billion question

Sapa | 26 April, 2013 | Times Live

Questions have been raised about the suspected spending of around R1 billion at PetroSA, according it was reported on Friday.

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

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 US20m (around R162m) extra expenditure.

After the deal was finalised, Johannesburg lawyer George Sabelo was paid a “success fee” of R11.4m, 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 R19m, replacing it with the local firm, Mahloele’s Harith Fund Managers.

Harith was reportedly promised at least R371m on completion of the deal. HSBC’s success fee on the same deal would have been R35m.

After Tenza left, Harith’s success fee was negotiated down to R187m.

On Thursday, Hawks spokesman Captain Paul Ramaloko told the Mail&Guardian an investigation involving PetroSA was underway.

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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