Forensic audit reveals… A family Affair at GuyOil …

Forensic audit reveals…A family affair at GuyOil…Sacked boss gave multi-million$$ contracts to brother, nephew

MARCH 25, 2016 | BY |

-approved gas station for brother-in-law
-placed $$millions in employee’s credit card


Badrie Persaud

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 agave 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.

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  • ndtewarie  On March 26, 2016 at 9:06 am


  • Chris Prashad  On March 26, 2016 at 10:42 am

    These corrupt bastards should be prosecuted to the fullest extent and have
    all related assets seized on behalf of the Guyanese People. This news almost made me puked. Kudos to the investigators for bringing all these corrupt scumbags to light.
    No wonder we could not see any progress. Promoting Perpetual Poverty (PPP) was their motto. May real justice be done.

  • Albert  On March 26, 2016 at 11:13 am

    Under a dictatorship these guys would have been arrested, thrown in jail and the stolen property returned to the state. Unfortunately Granger is trying to manage a so called democracy, but he does not know how to put away crooks in such a system. So the crooks will live to rise again should Jagdeo win at the next election.

  • Rosaliene Bacchus  On March 26, 2016 at 1:55 pm

    The people of Guyana and the world over are drowning in corruption in varying degrees. The leftist Brazilian government is facing collapse.

    Dictatorships are the most corrupt forms of government. They make and break the law. People of integrity can become enemies of the state. Be careful what you wish for, my friend. Granger has to tread softly because no political party is corruption-free.

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