The Triton Petroleum Company’s oil scandal remains the biggest blot on State-run petroleum distributor Kenya Pipeline Company’s (KPC) troubled past. Triton boss Yagnesh Devani was indicted for colluding with KPC staff and using political connections to defraud oil marketers and financiers more than Sh7 billion worth of petroleum products. Mr Devani remains a fugitive in the United Kingdom fighting extradition to Kenya, and late last month, the Court of Appeal in Nairobi made a landmark ruling in the saga that remains alive 11 years later. Dutch lender ABN Amro, one of Triton Petroleum Company’s financiers in the smoke and mirrors deal, lost a six-year battle to recover Sh1.7 billion from KPC, a bill that would have been footed by Kenyan taxpayers. Before a merger between the two banks in 2010, ABN Amro was operating in Kenya as Fortis Bank when Devani approached the lender with the deal that would set off one of the biggest oil scams in the country’s history. “Fortis Bank was to finance the purchase of various consignments of petroleum products by the Triton Companies,” explains ABN Amro in its court filings in part. The bank would finance the purchase, shipment, storage and inspection charges of the products on behalf of Triton. “The cargo would then be discharged at the Kipevu Oil Storage Facility (Kosf), who was to hold this cargo in trust for Fortis, and would only release it to any other parties after receiving a release order from Fortis,” explains the bank in part Under this agreement, the bank financed the purchase of 12.6 million tonnes of products from Chevron and the consignment delivered in July 2008. A few weeks later, Triton informed Fortis of a deal it had reached with Total for the sale of 8,000 tonnes. Total confirmed this and committed to making a payment to Fortis upon which the bank authorised KPC to release the products in question. A month later, however, Total cancelled the transaction with Triton and voided the payment commitment to Fortis. The bank also cancelled the authorisation it had issued to KPC to release the 8,000 tonnes of petroleum products. In January 2008, KPC informed Fortis Bank that “the stock in Triton under collateral agreement with Fortis was nil. This left the taxman facing a legal exposure of more than Sh5.5 billion as of 2009, with Mr Devani, the architect of the deal, taking off. ABN Amro […]
