The immediate past Group Chief Executive Officer (GCEO) of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, on Tuesday denied allegations that N210 trillion went missing from the company’s accounts during his tenure, insisting that the disputed figures were the result of accounting and bookkeeping entries and not financial losses.
Kyari, who appeared before the Senate Committee on Public Accounts at the National Assembly, also dismissed allegations of irregular payments relating to the registration and incorporation of the NNPCL, explaining that the transactions were statutory payments made to government agencies on behalf of the Federation.
He, however, said the N210 trillion figure cited in the audit report was a misinterpretation of entries in the company’s financial records.
“I would like to state very frontally that the previous engagements with our team, particularly our former Chief Financial Officers and other officers who came, it’s a continuum, it’s a very continuous, it’s a going concern, the NNPCL.
“I doubt the submissions made by the former Chief Financial Officer in respect of the financial reports that are submitted, and also to be very specific on two issues that may require my specific description, which is in my report.
“The issue of N210 trillion that is misconstrued in the reports to have been lost, I confirm this moment that nothing is lost.
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👉 JOIN GISTSMATE WHATSAPP CHANNEL“It’s simply not possible under my care and under my leadership for that to happen. But it did not happen, and there are actually entry issues, which I know have been clarified. They are all issues of bookkeeping that have nothing to do with any losses,” he said.
On the controversy surrounding the incorporation of the NNPCL and the alleged bogus registration fees, the former GCEO said the N2.99bn payment in question was made to the relevant government institutions for statutory services and was ultimately a responsibility of the Federation.
According to him, the Petroleum Industry Act (PIA), which established the framework for the transition of the former Nigerian National Petroleum Corporation into a limited liability company, placed the responsibility for incorporating the company on its owners.
He explained that although the NNPCL made the payment on behalf of the Federation, the amount was subsequently charged to Federation revenue.
Kyari said, “It is actually a Federation role because the PIA, which this National Assembly passed, has said that the owners of the company should incorporate the company.
“In this case, the owner of the company at that moment, NNPCL, was not necessarily the owner of the company. The NNPCL belongs to the old Federation. It wasn’t so in the past, and at that moment, the Federation must pay for that role for the incorporation.
“The NNPCL, which was not owned by the Federation at that moment in time, paid on behalf of the Federation and then charged it to a Federation’s revenue, which is sitting in what we call the former NAPIMS of NNPCL.”
He put the payment at N2.99bn, stressing that it was not the amount allegedly circulated in some public accounts suggesting that billions of dollars were spent on naming the company.
“It is about N2.99bn. It’s actually a payment to statutory institutions of government that have that role to do,” he said.
Kyari further clarified that the name NNPCL was provided for under the PIA passed by the National Assembly and that the company did not pay any fee for the legislature to name it.
“Actually, this company was named by the National Assembly, so you don’t need to pay any kobo to register that company. The company was named by the National Assembly in appropriate sections of the PIA.
“So there is no such thing. I think it’s a description issue, and we apologise if that wasn’t properly captured by the auditors, but I know that it was really a matter of description,” he added.
The former NNPCL boss also defended his record in office, saying he introduced a transparency and accountability framework upon assuming leadership of the corporation in 2019.
He said the framework led to the publication of the company’s financial records for the first time in its 43-year history, exposing its operations to public scrutiny and helping to improve its performance.
Kyari said the company’s financial records showed that it recorded a loss of $803bn in 2018, before his tenure, but that sustained reforms and cost-saving measures helped turn its fortunes around.
“This company fostered $803 billion loss in 2018. And, of course, I took over in 2019, and we did everything possible until it became a positive company and making sustained profits as a company in these 44 years that it did not do,” he said.
He added that public scrutiny and recommendations arising from the publication of the company’s financial records helped management identify areas requiring improvement.
The former GCEO also said his administration implemented decisions of the Federal Government and the National Assembly on the petroleum sector, including the transition towards a market-based petroleum products regime, while supporting investments in the oil and gas industry.
Kyari apologised for his absence at previous sittings of the committee, attributing it to medical and family-related circumstances.
He said, “I sincerely regret that I was unable to be with you during those hearings. It was unavoidable. I was medically indisposed, including some of the family issues associated with the medical situation.”
Responding after Kyari’s presentation, the Chairman of the committee, Senator Ibrahim Dankwambo, said the investigation had not concluded, stressing that members would study the submissions made by the former GCEO and other former NNPCL officials before determining the next line of action.
Dankwambo said the committee had collated the reports and responses submitted by the former executives and would circulate them to members for further examination.
He said, “We will circulate the reports to members for study. And if there are further interrogations on these reports or submissions, then we will have cause to invite any one of them or collectively all of them to come and respond to these issues.”
The chairman added that the committee would also invite the Office of the Auditor-General of the Federation to provide guidance on the issues raised in the audit reports.
He stressed that the committee would reconcile and interrogate the disputed figures before reaching any conclusion.
“We will look at the figures. We will interrogate the figures. It is not over. We will sit together. All members will be circulated with the copies of the responses. I will take the investigation going forward,” Dankwambo said.
He further explained that the committee was examining two items on the company’s balance sheet which, when viewed from different accounting perspectives, produced the N210 trillion figure under scrutiny.
The chairman consequently put the question of discharging Kyari from further appearance before the committee to a vote, with members voting in favour of allowing him to go after his submission, pending further examination of his responses.
He, however, made it clear that the decision did not amount to the conclusion of the investigation, as the committee would determine whether further explanations or appearances were necessary after studying the documents.
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