Minister takes witness stand in Sh7b Triton saga

By JUDY OGUTU A case touching on alleged irregular release of petroleum products worth billions of shillings to Triton Oil Company has kicked off with Energy Minister Kiraitu Murungi taking the witness stand.
Mr Murungi told an Anti-Corruption Court that Kenya Pipeline Company (KPC) irregularly released petroleum products worth Sh7.59 billion to Triton between November 2007 and 2008.
The minister told Senior Principal Magistrate, Lucy Nyambura, that without letters of release from the financiers of Triton, the products should not have been released.
"KPC held the products in trust (for the financiers). Triton imported the products but under the Collateral Financing Agreement, KPC was to hold products and not release them until it got letters from the banks. There was a breach of contractual obligation," he said of the decision by KPC.

Energy Minister Kiraitu Murungi was Monday a witness at the Anti-Corruption Court concerning the Sh7.6b Triton petroleum theft. He said the oil was released irregularly. [PHOTO: Evans Habil/STANDARD]

Accused jointly
The minister was giving evidence in a case where businessman Yagnesh Devani, Mahindra Pathak, Julius Kyalo Kilonzo, Collin Otieno and Triton Petroleum are accused of jointly disposing off 13 million cubic metres of diesel worth Sh32,047,783 without consent of Emirates National Oil Corporation (Singapore).
Others charged are Benedict Mutua, Peter Manono Mecha and Phanuel Silvano. They are all charged with conspiring to defraud a number of petroleum companies by purporting that Triton had diesel ready for sale at KPC storage in Kipevu.
Devani has been on the run since the scandal surfaced and the Government is trying to have him extradited from the UK.
Kiraitu told the court that in January 2009, when he was on holiday with his family in Mombasa, he received a call from Energy PS, Patrick Nyoike, who informed him the pipeline had been shut down for stock-taking at a time when there was a fuel shortage.
A full brief
He travelled back to Nairobi where they summoned former KPC Managing Director, George Okungu, and asked him to give them a full briefing.
Mr Okungu then told them about the Collateral Financing Agreement, through which KPC assisted local companies to purchase petroleum products from oversees suppliers. When KPC received those imported products, it would hold them in trust for the financiers and would not release them until it had received letters of release duly signed by signatories of the financiers, the court heard.
The MD, the court further heard, told the minister and PS that KPC’s operations department had released to Triton Oil Company a total of 126 million litres of petroleum without approval letters.
Following the revelation, Kiraitu directed the MD to convene an urgent board meeting to deliberate on the issue and report back to him. A meeting was held and board members said they had been kept in the dark about the collateral financing by management and were, therefore, not aware of the release of the products.