Former Energy and Petroleum Regulatory Authority Director-General, Daniel Kiptoo and ex-Managing Director Kenya Pipeline Joe Sang (Left) before the National Assembly Committee on Energy at Panari Hotel, Nairobi on Tuesday, November 7, 2023.
Three former top energy bosses are expected to appear in court today as the Sh4.8 billion fuel scandal case enters a critical judicial phase.
Kenya Pipeline Company (KPC) Managing Director Joe Sang, Petroleum Principal Secretary Mohamed Liban and Energy and Petroleum Regulatory Authority (Epra) Director-General Daniel Kiptoo Bargoria resigned on Saturday following arrests over the scandal.
From left: Outgoing Kenya Pipeline Company MD Joe Sang, outgoing Petroleum PS Mohamed LIban and outgoing EPRA DG Daniel Kiptoo. The trio have resigned amid investigations into the procurement of substandard fuel.
They are being investigated over accusations of importing adulterated and substandard fuel. The widening probe has roped in senior government officials and exposed deep-rooted irregularities in the energy sector.
The suspects’ appearance in court is likely to set the tone for what could become one of the most consequential corruption trials in the energy sector in recent years
The court proceedings are expected to shed light on the role of various agencies in the Government-to-Government fuel importation framework, and whether systemic loopholes were exploited to facilitate the entry of the disputed consignment.
At the same time, the KPC board has distanced itself from the mega fuel scandal, stating that it did not approve the importation plan.
KPC Director Mutungwa Wambua said those involved acted outside the board’s authority and should be held individually accountable.
“I can confirm that no instructions were issued by the board for the importation of such fuel. Those who circumvented the system will be prosecuted,” he said.
Authorities are also probing whether the deal exploited the ongoing Middle East crisis to flood the Kenyan market with substandard fuel, and how cartels may have undermined the Government-to-Government import framework.
Cabinet ministers Mr Opiyo Wandayi (Energy) and his Investment, Trade and Industry counterpart, Mr Lee Kinyanjui, have also been sucked into the scandal. They may be required to shed light on the matter.
Shipping data shows that oil tanker MT Paloma is currently en route to Port Elizabeth, South Africa, after docking at the Kipevu Oil Terminal in Mombasa between March 27 and 29, carrying about 60,000 to 68,000 tonnes of petroleum products. It departed Mombasa around March 30.
United Democratic Alliance Secretary-General Hassan Omar has called for tough penalties against the people involved in the deal.
“We are asking the concerned agencies to conduct thorough investigations and ensure that those responsible pay up to five times the cost as penalties, amounting to more than Sh15 billion,” he said in Mombasa.
As the fuel saga unfolds, a previous report by Auditor-General Nancy Gathungu shows that former Epra boss Mr Kiptoo is not new to controversy.
A past audit report shows that Mr Kiptoo sat in an Epra board meeting that facilitated his own appointment in 2021, following the sacking of his predecessor, Mr Pavel Oimeke, under similar circumstances.
Also Read: Inside Kenya’s Easter fuel saga
The audit on Epra’s accounts for the 2020/21 financial year further established that Mr Kiptoo lacked the requisite qualifications for appointment as director-general at the time.
He had been serving as acting director-general before his substantive appointment by the Energy Cabinet Secretary Charles Keter on June 28, 2021.
According to the audit report tabled in the National Assembly, a review of human resource records and board minutes revealed that he was appointed despite not meeting the minimum experience required under the Energy Act.
“A review of the applicant’s documents confirmed that the person lacked the requisite senior-level management experience for appointment as DG. The regularity and suitability of the appointment were a breach of the law,” the report states.
Section 13(1) of the Energy Act provides that the board, subject to approval by the Cabinet Secretary, appoints the director-general, who serves as the authority’s chief executive officer. Section 13(3)(c) and (d) further requires at least seven years’ senior management experience and two years in the petroleum or energy sector.
Board minutes show the director-general’s position was declared vacant on March 31, 2021, and advertised on April 27, 2021, following Mr Oimeke’s interdiction. The board’s 83rd special meeting on May 20, 2021, delegated shortlisting to its Finance and Administration Committee, which oversaw a process that attracted 23 applicants.
The board sought approval from the Cabinet Secretary on June 28, 2021, and the same day, Mr Kiptoo was appointed and accepted the offer contrary to the law.
Earlier, the audit indicates, the board had, in its 79th special meeting on December 14, 2020, recommended the appointment of one of its own members as acting director-general.
Auditors found it irregular that board members failed to declare a conflict of interest, even as the individual participated in the meeting that facilitated his own appointment, contrary to the Mwongozo Code of Governance.
Records further show the board issued an appointment letter on December 14, 2020, before receiving approval from the ministry, which only came a day later.
“This implies that the board appointed him before obtaining approval from the Ministry of Energy,” the audit notes, terming the move a violation of the Energy Act, 2019.
