Marketer OiLibya, which is currently operating as Ola Energy, lost 8.5 million litres of fuel between 2012 and 2014 in a racket at the Nairobi terminal involving its own employees, Kenya Pipeline Company (KPC) staff and KenGen workers.
This is revealed in court papers in a case where former manager Paul Mwaponda was contesting his sacking for his alleged role in the saga. The company said a Deloitte audit had revealed the ploy where fuel was being siphoned for years while its managers looked the other way.
“It is worth noting that, in my opinion, that they painted the picture of a general lapses in the management of the respondent’s stocks, and a weak ACCPAC system which could easily be manipulated to the detriment of the company by its own staff under the cover of its management who chaired the committees which were set up to deal with the problem but turned a blind eye for years,” said Justice Onesmus Makau.
The racket was ran by Nairobi Terminal Stocks Accountants who made fake book entries that OiLibya fuel stock had been returned to the storage yet the fuel was loaded to KenGen, a through-putter and carted off.
Several discrepancies cropped up that led to internal audits where it was discovered that several fuel stocks had been erroneously adjusted by KPC.
The oil marketer hired Deloitte to conduct a forensic audit that revealed even higher leakages of 2.8 million, 3.6 million and 2.1 million litres of Gasoil diesel, Super Petrol and Kerosene respectively in a March 2015 report.
Mr Mwaponda was fired after the incident but challenged the decision in court, and has now been awarded Sh9.8 million for unlawful dismissal.
Mr Mwaponda had faced a disciplinary committee where he successfully defended himself saying his department was not responsible for stock reconciliation at the terminal, but Oilibya still fired him on grounds that it had lost trust in him.