Reported by Tuko
- Auditor General's report showed the state corporation suffered a KS 62,455,000 loss in 2016-2017 financial year
- Accumulative losses stood at KSh 1,283,690,000 as at June 30, 2017, according to the Auditor General's report
- The corporation also lost over KSh 300 million in 2018 in the hands of a petrolatum dealer it sub-contracted to run some of its operations
- NOCK had entered into a contract with Kenya Ports Authority (KPA) in September 2016 to supply oil to KPA's stations
- The corporation then in October 2016 inked another deal with Great White Investments Limited to manage its client, KPA
- An internal audit report released in 2017 revealed Great White Investments mismanaged sites and allegedly embezzled funds
- The 2017 audit report recommended to the CEO, Mary Jane Mwangi, who was appointed in 2016, to deal with KPA directly
- Despite the massive losses incurred through sub-contracting, the NOCK's boss has reportedly been adamant to let go of the Great White Investments Ltd When Mary Jane Mwangi was appointed the CEO of National Oil Corporation of Kenya (NOCK) in July 2016, there was hope that the new chief would turn around the fortunes of the giant state corporation and return it to profit-making. Mwangi, who replaced Sumayya Hassan-Athmani, took over at a time when NOCK was struggling with huge losses, bank loans and serious cash flow issues. It was evident her job was not going to be an easy one.
A year later, the new boss had reportedly managed to slash a KSh 808 million loss that was registered in the 2015-2016 financial year (FY) when she took office to about KSh 67 million in the 2016-2017 FY, an impressive performance by all indications, or so it appeared. Fast-forward, the state corporation's financial woes seem to be far from over with fresh audit reports seen by TUKO.co.ke on Thursday, December 13, indicating the situation could be getting out of hand. The Auditor General's report for the year ended June 30, 2017, shows NOCK, the body mandated by law to market petroleum products on behalf of the government, suffered a KSh 62,455,000 loss. The corporation's accumulative losses staggered at KSh 1,283,690,000 as at June 30, 2017 according to the Auditor General Edward Ouko who sub-contracted Deloitte & Touche to audit the state-owned oil firm.
Documents in possession of TUKO.co.ke further revealed NOCK has been bleeding cash through a petroleum dealer it sub-contracted to manage one of its clients. The corporation has several parastatals as its clients including Kenya Electricity Generating Company (Kengen), Kenya Railways (KQ), Kenya Ports Authority (KPA) and Tullow Oil. The firm lost over KSh 400 million in 2018 in the hands of a petroleum transporter, Great White Investments Limited, which it sub-contracted to manage some of its sites. NOCK, TUKO.co.ke established, had entered into a contract with Kenya Ports Authority (KPA) in September 2016 to supply oil to the Authority's stations in Mombasa. The corporation, however, in October 2016 inked a deal with Great White Investments to manage KPA stations on its behalf.
An internal audit report released in 2017 revealed Great White Investments, whose directors include one James Mwangi, mismanaged the sites and siphoned funds from NOCK. The 2017 audit report recommended that NOCK should take over management of its contract with KPA instead of sub-contracting Great White Investments, which it paid KSh 80 million for site management, transport of fuel and hiring of bowsers. The corporation often adopted the best strategy of managing the sites itself by having staff run the operations. Under this strategy, NOCK sets up storage facilities within the parastatals' establishments and delivers fuel to the site that the companies consume then they are billed. The model reportedly enabled the corporation to control losses of products at the sites.
However, despite this being the best model, the current management allegedly decided to adopt another model where they handed over KPA stations in Mombasa to Great White Investments Limited. Documents seen by TUKO.co.ke showed sub-contracting a petroleum dealer to manage a client put the state corporation at the risk of incurring losses at the site. The CEO, Mwangi, is said to be adamant to let go of Great White Investments. This is despite the audit reports indicating Great White Investments, which also turned out to be missing in the Energy Regulatory Commission (ERC) register as an authorised petroleum dealer, was costing the NOCK huge losses. It is alleged the CEO never presented the internal audit report recommendations to the board. As of December 13, 2018, Great White Investments was still managing sites on behalf of NOCK even as millions continued to disappear. The documents in TUKO.co.ke's possession painted a picture of a possible conspiracy between senior officials at NOCK and Great White Investments staff to embezzle public funds.