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BDCs not cited for fraud

  • SOURCE: | qwesa2big
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    The Managing Director of Bulk Oil Storage and Transportation (BOST), Kingsley Kwame Awuah-Darko, has denied allegations of fraud against the Bulk Oil Distributing Companies (BDCs).

    Recent media reports alleged that some top officials at BOST connived with some BDCs to rob the state-owned enterprise (BOST) of petroleum products at the depots, leading to losses that affected the national strategic reserve of petroleum products.

    The publication in the state-owned Daily Graphic quoting an audit report said that the criminal activities were used to create a negative balance of BOST indebtedness to the BDCs.

    However, both BOST and the BDCs have denied those allegations, with Awuah-Darko absolving his company from the media publication.

    Chief Executive Officer (CEO) of the Ghana Chamber of Bulk Oil Distributors has called on President John Mahama to institute a probe into the matter to ascertain the truth.

    Even though the National Security has stepped in to conduct investigations into the matter, the BOST MD has called for a truce between his entity and the BDCs.

    Mr Awuah-Darko told Joy Fm that BOST had never gone out anywhere to make a claim of fraud against the BDCs.

    Ernst & Young Report

    Touching on the Ernst & Young audit report, he said the audit process was still ongoing, adding that there is no final report.

    According to the draft report, out of 16 BDCs being audited, Ernst & Young were unable to obtain enough evidence to conclusively recompile the stock positions of eight BDCs.

    The other set of eight were verified with higher balances assigned in their favour.

    Mr Awuah-Darko said, “All that we are saying is that in the stock balance audit process, there are some points that various BDCs have to provide further and better particulars.”

    However, Senyo Hosi, CEO, Ghana Chamber of Bulk Oil Distributors, said there are multiple independent sources that they could have contacted for data in the audit process.

    These sources, he said, include the independent inspectors like SGS International, CEPS and the Mooring Company.

    Mr Hosi also stated that the ongoing audit was not an audit of sudden claims being made by BDCs, explaining that they (BDCs), on a monthly basis, undertook reconciliations with BOST over the past six years.

    He further explained that the ongoing audit is a revalidation of the reconciled monthly positions between 2009 and July 2014 for each of the BDCs.

    Claims Of Liability

    Contrary to the draft report which was inconclusive, involving eight BDCs, BOST in letters to the BDCs claimed that they (BDCs) owed 2.13 billion litres of fuel worth GH¢7 billion.

    However, the BDCs chief executive rejected those claims, describing them as mischievous, arguing that BOST had no stocks of its own over the period and as such, could not claim that BDCs overdrew on its stocks.

    “Simply put, I cannot take what you don’t have. Even if BDCs overdrew on each other’s stocks, it will mathematically be impossible for an overdrawn position by a given set of BDCs to be higher than the amount of stocks due the under-drawn BDCs.

    “It is therefore out of place for BOST to claim to be owed 2.13bn litres when BDCs’ stock balance stood at 74 million litres,” Mr Hosi said.

    He explained that BOST products losses had arisen from in-transit losses through pipeline siphoning, depot pilfering and possible malfunctioning of in-depot measurement equipment.

    Mr Hosi said BDCs do not in any way physically interfere with the discharge or operation of the BOST in-depot and inter-depot activities.

    “It is therefore not possible to be a party to any of the causes of the product losses,” he said.

    Mr Hosi claimed that BOST had not been able to account for about 60 million litres of petroleum products worth $50 million belonging to the BDCs.

    Mr Awuah-Darko, in reaction to the claim, admitted that BOST owes the BDCs some balances, but he was quick to state that other accounts showed a negative balance.

    Going forward, the MD of BOST said, “There is the need for BDCs to sit down with BOST and figure out what happened.”

    BDCs Ready To Cooperate

    Senyo Hosi expressed excitement that the major players in the industry had come out to dispute the allegation of fraud against the BDCs.

    “It is nowhere in the report that there is connivance. I am very happy that the Ministry of Petroleum, BOST MD and the Chairman of BOST have all come out to clear the air. I think we should rather move on,” he urged.

    He disclosed that members of the BDCs wanted to take legal action but with the reconciliation tone of the BOST MD, “We realised that the spirit was right for us to sit down and jaw jaw.”


    Mr Hosi is asking Daily Graphic to retract and apologise for making false claims of fraud against the BDCs.

    According to him, the story was quite diabolic because the paper was quoting things that were not in the Ernst & Young report, stating “It is only Graphic that claims there is fraud. So it is onlyGraphic that can tell the world who did the fraud and with who.

    “But now that all the major players in the industry have denied making claims of fraud, there is the need for Graphic to apologise and retract the story.”

    Hosi continued, “You cannot go and establish fraud with a reconciliation audit…you can only establish fraud with a forensic audit, so there was no soundness in their reportage. I think they really owe the BDCs and the entire industry an apology and retraction of the story.”


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