State-owned National Petroleum Marketing Company Limited (NP) lost over US$500,000 in a bad deal on the sale of bunker fuel on the international market.
There are very few details of this deal available in the public domain, but Guardian Media understands that NP was dealing with a company named Black Gold on an international deal which soured and NP was left nursing a million dollar loss.
The deal was the subject of an internal audit which named operatives within NP as culpable but according to one NP insider, it appeared to have been swept under the carpet.
The limited information on the deal is contained in an internal “goodbye” email written by the outgoing chief executive officer at NP, Bernard Mitchell.
The email was sent to staff of January 14, one day before Mitchell’s tenure ended.
The email listed a series of questionable decisions taken at the State organisation and seemed to infer that the board was aware of the growing discord within the company.
Mitchell’s email to his former staff was entitled “until we meet again” and in that email, he outlined the “Black Gold fiasco” that cost the company over US$500,000 but which was never properly addressed by the board.
“The lack of sanction/accountability for the Black Gold fiasco which resulted in a loss of over US$500,000 for the company, although clear culpability could be determined from the Audit Report and General information known among staff,” Mitchell wrote.
While the letter did not say much more on that matter, NP insiders told Guardian Media that there was no proper due diligence conducted before NP decided to pursue the Black Gold matter.
“The requisite Board approvals were not obtained and that they could not find the principals of the company initially engaged,” the insider said.
“Our finance and legal staff were totally against the transaction but were directed to participate but this did not come out in the audit,” the source said.
“What is required is a forensic audit. There was also a report on this recently completed by the Ministry of Finance,” the insider said.
Mitchell’s letter also said that there was a “unsubstantiated delay” for over 10 months in hiring a chief procurement officer.
“Given that the shortlist of candidates to be interviewed was finalised in February 2019 and which is now impacting the company’s state of readiness and ability to adopt and comply with the requirements of the procurement legislation,” Mitchell said.
He also questioned the executive decision to replace three directors “for no plausible reason” and the unilateral suspension of Board and Committee meetings for over three months from May to August 2019.
“Despite having a fully and duly constituted board of directors, this delaying decisions and the progress of the company,” Mitchell said in the letter.
Under the heading “exposures”, Mitchell listed three main concerns including the limited progress of the company Capital Projects, delays in executing key projects and initiatives and NP’s inability to enhance operating efficiencies.
Mitchell said that NP was unable to execute its capital projects because it lacked engineers. He said NP failed to execute the key projects because it lacked a Project Management office.
“I championed this with limited success because of the restrictions in hiring the required quality resources,” he said.
“My concern is that the real losers in this debacle are NP, the employees of NP and the stakeholders by extension,” Mitchell wrote.
“The work to ensure the long-term survival of the company had now started to gain momentum and the skills required to see it through are not available in abundance,” he said.
“If not properly addressed NP will become just another casualty enterprise that we read about daily,” Mitchell wrote.
Guardian Media contacted Mitchell yesterday on the matter of the email, but while he confirmed that it was his email to staff, he declined to comment further.
Guardian Media also contacted NP chairman Sahid Hosein who also declined to comment.
Hosein said he would address internal matters at NP at a later date.