Following statements on Wednesday by PetroSA, the state oil and gas company, that it will “have nothing to do” with Imvume Management in future and that Imvume has been ordered to pay back monies owed to it, the Democratic Alliance said in a statement that the National Prosecuting Authority (NPA) must now investigate Imvume.
PetroSA chairperson Popo Molefe faced tough questions from opposition MPs in the standing committee on public accounts on Wednesday morning.
The hearing arose after a Mail & Guardian exposé indicated that a double payment of R15-million had been made in December 2003 by PetroSA to Imvume, which in turn paid R11-million to the African National Congress for its April national election campaign last year.
“It is quite clear from the answers provided by PetroSA in response to questions from the Democratic Alliance about its transaction with Imvume Management, that Imvume misled PetroSA about the purpose for which it needed an advance payment of R15-million,” said the DA.
“It is also equally apparent that PetroSA failed to implement the appropriate internal financial checks and balances before granting the advance payment to Imvume Management.
Molefe stated that Imvume had cited “cash-flow problems” as the reason for the company’s request for an advance payment of R15-million.
“Mr Molefe stated that he was under the impression that Imvume had a cash-flow problem because it needed to pay for its employees annual bonuses and thus could not afford to make the R15-million payment to Glencore International for a shipment of oil condensate,” said the DA statement.
“However, it seems from the information published by the M&G that Imvume simply used most of the R15-million to make an R11-million donation to the African National Congress, resulting in its own effective insolvency and PetroSA having to make a double payment when Imvume failed to pay Glencore.
“Clearly, Imvume never had any intention of using the R15-million advance to pay for the oil condensate, and instead used public money to fund the ANC’s 2004 election campaign.
Molefe said neither he nor PetroSA was aware at the time of Imvume’s close relationship with the ANC.
“Imvume must now be made to answer for its actions to the South African taxpayer,” said the DA.
“Significantly, Mr Molefe stated that PetroSA had not undertaken a due diligence or risk assessment before granting the advance and acknowledged that ‘there was a lapse in terms on monitoring this particular transaction’.”
Molefe said PetroSA had failed in its oversight duties when it agreed to deposit the advance payment into a separate bank account, and conceded that the request by Imvume for the deposit to be made into a separate bank account was without precedent and highly unusual.
“There can now be no doubt that a thorough and in-depth investigation must be urgently instigated by the NPA into the relationship between Imvume and the ANC,” said the DA.
“Only a full forensic audit or public enquiry will disclose the full nature of the relationship between Imvume and the ANC, and how Imvume used PetroSA to grant an advance payment.
The DA said it has written to the NPA requesting a meeting to discuss this matter and is waiting for the NPA’s response.
ID ‘dismayed’ at proceedings
Also in a statement on Wednesday, the Independent Democrats said it is dismayed at the manner in which serious issues relating to Oilgate continue to be glossed over.
Lance Greyling, ID spokesperson on energy affairs, also put forward a number of questions earlier in the day pertaining to the suspicious transaction between PetroSA and Imvume.
“It is clear from the answers given that Imvume’s actions amounted to fraud in that it did not spend the advanced payment by PetroSA on its intended purpose,” stated Greyling. “It is still not clear why PetroSA did not institute criminal proceedings against Imvume and instead chose to turn the advance payment into a soft loan.”
Throughout the hearings, Molefe stated that a further payment to Glencore was needed in order to secure the oil condensate for its operations.
“PetroSA could have, however, got a legal order to secure the delivery of the oil condensate as the shipment was already in South African waters and the cargo was insured by PetroSA. Such a legal order would have been the right course of action, as payment to Glencore could have then been negotiated between Imvume, PetroSA and Glencore at a later stage.
“It is still unclear why PetroSA chose not to exercise this action,” said Greyling.
“It is also clear from the hearing that PetroSA chose to compromise on good corporate practice in order to advance certain black economic empowerment objectives. This was given as an explanation to the question as to why PetroSA changed the original bid document in which Glencore would be paid directly by PetroSA.
“They claimed that this was to empower Imvume so that they could undertake certain activities like training and skills transfer.
“It is unclear as to whether Imvume actually did undertake these activities and whether the interests of black economic empowerment were advanced,” claimed Greyling.
The ID said it is committed to uncovering the full extent of the “fraud that took place in this transaction” and ensuring that the people responsible are finally brought to justice.