Oil gate 2: DA requests Public Protector probe

I will today write to the Public Protector, Thuli Madonsela, requesting she initiate an investigation into the R1 billion Oil gate scandal at PetroSA as revealed in the Mail and Guardian today (see here). 

According to the Mail and Guardian - under the leadership of former PetroSA Acting CEO, Yekani Tenza - top managers at the state entity ordered irregular payments of R200 million and risked another R800 million in potential liabilities, bringing the total questionable expenditure at the state entity to R1 billion.

The allegations involve two deals - PetroSA's acquisition of a company in Ghana last year, and their plan to buy petrol stations across South Africa.

In the Ghana acquisition, the former Acting CEO of PetroSA, Yekani Tenza and another PetroSA executive, Everton September, agreed to pay an extra $20-million (R162-million) to the Ghanaian company. On conclusion of the deal, Tenza had an R11.4-million "success fee" paid to a lawyer who had accompanied him to final negotiations. 

In the petrol stations deal, the original transaction advisor was fired, incurring a R19-million cancellation fee. Tenza replaced them with a much smaller local firm. On completion of the deal the smaller local firm was awarded a ‘success fee' of R371-million - 10 times the R35-million fee that would have been awarded if the original company had not been fired from the deal. This was renegotiated to R187-million following Tenza's departure.

I will therefore request the Public Protector to investigate: 

• Whether supply chain management processes were followed in the Ghana deal;
• The "success fee" paid to the lawyer that accompanied Tenza to London on conclusion of the Ghana deal;
• The reasons why the original transaction advisor was fired; and
• The "success fee" paid to the local firm that provided advice on PetroSA's acquisition of petrol stations in South Africa

Furthermore, I will be requesting the Chairman of the Standing Committee on Public Accounts (SCOPA), Themba Godi, to summon the Minister of Energy, Dipuo Peters alongside Mr Tenza, to appear before the committee and explain the processes followed in the acquisition of the Ghanaian oil and allegations of dubious spending in the entity. The Minister has, in the past, refused to answer sensitive questions pertaining to PetroSA. The committee must not allow this. 

South Africa cannot afford to continue haemorrhaging public funds that could otherwise be used to improve the lives of those that live in desperate conditions in our country.

Those found guilty of acting unlawfully in this instance, must be held accountable. A simple slap on the wrist, as has become the norm in such cases, will simply not suffice.

Statement issued by Jacques Smalle MP, DA Shadow Deputy Minister of Energy, April 26 2013

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