KACC asked to probe $98.7 million Triton oil theft at Kenya Pipeline

Basically, it works in the following way: First, any oil marketing company that wants to bring oil into Kenya, Uganda, Rwanda or Burundi must advise KPC of the grade and quantity required and the financier of the product.

Second, the product is collected from KPC on the written authorisation of the financiers, which has to give names of its authorised signatories.

How Triton managed to collude with insiders to breach what until recently was regarded as a fairly secure system is perhaps the most intriguing aspect of the saga.

Obviously, the investigations by KACC will have to extend to oil companies and the relevant individuals within the staff of the banks who signed the letters of release.

According to available documents, Triton Petroleum signed a collateral finance agreement with KPC on July 4, 2004.

Former managing director Shem Ochuodho signed on KPC’s behalf, with Y.M Devani signing on Triton’s behalf.

Triton’s growth since had been at an exponential rate. Alarm bells rang in November last year when KPC was bombarded with letters from financiers demanding updated statements on stock inventories held in trust on their behalf and Triton’s.

Apparently, it was at this stage that it emerged that Triton had fallen back in payments to these financiers, while at the same time not apparently drawing down the oil it had ordered.

The game of deception had started in earnest. Junior KPC officials working in the operations department wrote letters to Kenya Commercial Bank, Glencore of the UK and Fortis Bank of France, providing them with false information to the effect that all was well and that the stocks were intact.

Although Emirates National Oil Corporation (Enoc) had also supplied Triton with substantial quantities of petroleum products, the company had not complained at that point in time.

KCB, Fortis and Glencore responded to the false information provided by KPC by directing that no more product be released to Triton.

Smelling danger, the top management ordered a fresh audit of stocks including reconciliation of what was being held in trust for respective financiers.

The audit was to reveal that all stocks, which ought to have been held in trust, had been clandestinely released to Triton between November 2007 and November last year with the authority of the financiers.

Consequently KPC wrote back to the financiers informing them that there were no stocks held for them in trust. Everything had been released to Triton.

In total, the volume of stocks released to Triton by KPC without written instructions amounted to 126.4 million litres.