How the deception game was hatched

• In seeking the perpetrators of the scam, the dragnet will have to be cast wide

It explicitly states that KPC shall release the type and quantity of oil only upon receipt of duly signed instructions from the financier’s authorised signatories.

It also obliges KPC to release regular statements on stocks held in trust at agreed intervals to the financiers.

The collateral financing system was introduced to allow into the industry independent players unable to import commercially viable quantities.

Mr Devani had come up with a scheme that allowed him to draw oil from the KPC system without paying for it.

He clearly took advantage of the fact that although KPC is at an advanced stage of implementing the SAP system, the modules expected to give live data on product accounting and stock movement are yet to be completed.

Until the investigations are complete, it is not possible to tell whether signatures were being forged or instructions were coming from the top to have the product clandestinely released.

As a matter of fact, the KPC internal audit report which unearthed the Triton scam specifically mentions cases where Ministry of Energy officials were calling KPC’s scheduling office directly to instruct them to release fuel to preferred oil companies.

Indeed, what emerges from a close scrutiny of the internal report is a system that was prone to manipulation. KPC has had no clear internal mechanism of authenticating information from financiers.

Letterheads

There were cases where releases sent via e-mails from financiers either did not have letterheads or were done on different letterheads. KPC was releasing oil based on documents that were manifestly inconsistent.

Lists of signatories for financiers were updated infrequently. Clearly, the system KPC put in place offered a perfect environment for shady dealings and corruption.

By exploiting the loopholes in the system, Mr Devani was now in a position where he could engage in “oil-kiting” — endlessly borrowing from Peter to pay Paul.

In the process, he incurred huge debts, only managing to mask his financial blemishes by siphoning money out of the Kenya Pipeline system.

In hindsight, and considering the volumes involved and the fact that the value of the transactions run into billions of shillings, the KPC system offered a good avenue for money laundering.

In 2006, Triton was among the firms named in Parliament as among the companies that received large loans from the troubled CharterHouse Bank in contravention of banking regulations.