Mar 25, 2016 News
-approved gas station for brother-in-law
-placed $$millions in employee’s credit card
The forensic audit report on the Guyana Oil Company (GuyOil) is out and it speaks of deep, dirty rackets
that were being run at the entity.
Its former chief, Badrie Persaud, gave out contracts and benefits without any control to family and friends.
The audit, ordered last year by the David Granger administration, has been released by the Ministry of Finance. It tells of multi-million-dollar contracts by Persaud, and inappropriate transfers to an employee’s credit card to make overseas payments on behalf of that state-owned entity.
The GuyOil chief was sacked a few weeks ago for taking unauthorized decisions during his tenure.
He was sent on administrative leave mid-last year, shortly after the new government took office.
The audit, conducted by Nigel Hinds Financial Services, said that undisclosed and ignored conflicts of interest occurred between November 1, 2011 and May 31, 2015.
During the period, Persaud awarded transportation contracts worth $62M to his brother, Indarjeet Persaud, and a construction contract for $860,000 to his nephew, Avinash Persaud.
The audit found that the brother continued to provide transportation services with the fuel tankers although the contract period had expired.
The report recommended that Persaud be disciplined for non-disclosure of conflicts of interest, awarding of contract to his nephew and multiple breaches of GuyOil’s procurement policies.
The report also flagged Persaud’s decision to become a candidate for the People’s Progressive Party/Civic national list for the May 11, 2015 General Elections.
“Adherence to the decisions of a political party concurrent with managing a state owned corporation, creates conflict of interest issues that have negative implications for employee morale”, use of GuyOil’s resources and its image, the report said.
There was an absence of comprehensive manuals documenting policies, procedures, and work instructions for the Board of Directors, Administration, Finance, Audit, Marketing, Information Technology and Security. The absence of a Board of Directors’ Charter was one example.
GuyOil had 30-odd dealers but under the Managing Director’s watch they were poorly managed. Auditors could find no evidence on the files for critical documents like ID, Tax Identification Number (TIN), transport, lease, tenancy agreement, relevant Guyana Energy Agency licences and insurance coverage.
The auditors also flagged the absence of a Marketing Manager at GuyOil.
“The functions of the Marketing Director were performed by the Managing Director allowing for the avoidance of checks and balances – as one would expect in the largest government corporation by revenue.”
GuyOil also breached its own agreement with dealers allowing them to get credit on fuel supplied without a bank guarantee or security bond– in other words, GuyOil had no protection against a customer who refused to pay.
As a matter of fact, the report said, GuyOil was not concerned about its inaction to manage the collection of monies from customers.
“There was and continues to be major irregularities in the charge system used for fuel sales to customers with charge accounts.
“A 10% sample of 758 charge customers was conducted and our findings revealed that over fifty percent were irreconcilable and improperly managed.”
In one case, a GuyOil staffer even signed a guarantee that a customer, Mohamed Bacchus, would get a $5M credit limit. The guarantee was signed by Leonard Khan, then manager of the Castrol brand and the brother-in-law of Bacchus.
With regards to how GuyOil went about procuring services and supplies, Persaud overlooked a system where he invariably went to a single person or company.
An example of this occurred over the period under review, where purchases exceeding $90M were made from Manesh Seeram, an Information Technology supplier.
The audit report explained that GuyOil does not have a credit card facility and in order to obtain goods from overseas; monies for purchases from GuyOil were transferred to the account of employee Azaad Hassan, the IT Network Administrator.
Aside from the failure of GuyOil to establish a corporate debit/credit card facility, inherent weaknesses in this method of purchasing unnecessarily expose the corporation to opportunities for fraud by insiders, the report pointed out.
According to the report, GuyOil is a state-owned public company, where its major share-holder benefits from dividends, taxes and related payments. The services GuyOil provides act as leverage against unfair petrol pricing, thus providing economic relief to the public. Its main competitors are multi-national companies, Sol Guyana Inc., Rubis and other importers of fuel and lubricants.
GuyOil operates three bulk terminals– at Providence, Georgetown; Heathburn, Berbice; and Adventure, Essequibo, and seven service stations.
In addition, GuyOil has 36 dealers for its petrol and Castrol lubricants across the regions. It employs over 300 personnel.
Jun 21, 2021Kaieteur News – By Franklin Wilson Team Evolution’s Christopher ‘Chicken Legs’ Griffith crossed the line in One Hour 41 Minutes 36.22 Seconds to win the Banks DIH sponsored Malta...
Jun 21, 2021
Jun 21, 2021
Jun 20, 2021
Jun 20, 2021
Jun 20, 2021
Kaieteur News – I am quoting the words of Dr. Rupert Roopnaraine in an interview of September, 2017, that he gave Dr.... more
By Sir Ronald Sanders More commonality was shown by CARICOM countries in a vote on Tuesday June 15 at the Organisation of... more
Freedom of speech is our core value at Kaieteur News. If the letter/e-mail you sent was not published, and you believe that its contents were not libellous, let us know, please contact us by phone or email.
Feel free to send us your comments and/or criticisms.
Contact: 624-6456; 225-8452; 225-8458; 225-8463; 225-8465; 225-8473 or 225-8491.
Or by Email: [email protected] / [email protected]