Out of court deal for KPC oil scandal

The Government on Friday struck a deal with financiers to settle the Sh7.6 billion oil scandal at the Kenya Petroleum Company without litigation.

A meeting with both local and international financiers came against the backdrop of threats that they could move to court to compel KPC to pay for the loss of money through the irregular release of oil stocks to Triton Petroleum.

The Government, on its part, had expressed fears that the key artery in the distribution of oil in the country and other landlocked nations in Eastern Africa could face liquidation if it was taken to court by the financiers.

KPC had released stocks of oil worth Sh7.6 billion that it had held in its trust and was under instructions not to deliver the oil to Triton without authorisation.

That was why Energy minister Kiraitu Murungi, permanent secretary Patrick Nyoike and other ministry officials met representatives of Kenya Commercial Bank (KCB), Fortis of France, Emirates, National Oil Corporation, Ecobank and Equatorial Bank in a bid to ensure that they do not go to court to press charges against KPC.

Sources said that, during an informal meeting, the Government promised to track down directors of Triton, including the chief executive Yagnesh Devani, and ensure that they pay for the lost money.

Not panic

The financiers were assured that they should not panic because the Government was working with Interpol to bring back Mr Devani, who slipped out of the country after the scandal surfaced in December, to pay for the oil stocks that were released to his company.

The Government is said to have described KPC as being very important to the economy of Kenya and other landlocked countries and would not allow a scheme of few individuals to bring it down.

The Government believes that the oil scandal was a conspiracy among employees of financiers, oil marketing companies, KPC and Triton.

The employees of the four players, it is claimed, took advantage of loopholes in the Collateral Financial Agreement (CFA) to release the oil without authority from the financiers.

Government assured financiers that the CFA would be strengthened to seal loopholes that were exploited by schemers of the scandal.