“Aminata & Sons Untouchable ” - Say Insiders of Company’s Link to Some Higher–Ups
November 10, 2015
“Aminata & Sons is untouchable. This is mainly because there are some higher-ups in the Government of Liberia(GOL)who have shares in Aminata & Sons and so they will do anything to protect the company even if it even flouts the law or defraud the government,” these were the assertions of some insiders of the Government of Liberia "GOL"
The government insiders, speaking on condition of anonymity, named several instances in which Aminata&Sons either “violated” the law or “defrauded” the government, but the company was never prosecuted because of its link to some big names in government, whom they chose not to name.
The government insiders, who expressed outrage over “Aminata & Sons untouchable posture”, wondered why the government, which preaches the doctrine of good governance, accountability and transparency, would allow Aminata & Sons to be law unto itself and be seemingly involved in unscrupulous business practices under its nose and unchecked.
The government insiders’ assertions come on the heels of a launched investigation by the Liberia Revenue Authority (LRA) into Aminata & Sons “misdirecting” of fuel belonging to the Liberia Water & Sewer Corporation (LWSC), a government owned entity by Aminata & Sons, which is headed by Mr. Siaka Toure, is a private Liberian owned company involved in the importation, distribution and sales of petroleum products on the Liberian market. The company is currently the vendor for the LWSC, which enjoys duty free privilege on fuel.
Recently, the LRA suspended Aminata &Sons from lifting duty free products at the Liberia Petroleum and Refinery Company(LPRC) pending the completion of the launched investigation.
According to press release issued in Monrovia, the LRA disclosed that an Aminata & Sons tanker and its product, which were due to be delivered to the LWSC head office in Monrovia, were instead diverted to Aminata’s local station in Kakata City, Margibi County.
The release further disclosed that the tanker was on Wednesday, October 28 impounded and returned to Monrovia after the LRA through its covert operations, uncovered the scheme.
LRA Customs Commissioner Saa Saamoi said after Aminata lifted the fuel from the compound of LPRC on Bushrod Island, tanker was covertly followed to authenticate its destination.
“At the end of the day, what should have been a delivery at LWSC ended up at Aminata retail station in Kakata,” he said. The LRA stated that it cannot link any person from LWSC to the act until the investigation is completed.
Under the law, the LRA release pointed out, there is a penalty, a jail sentence of five years or confiscation of the product or all three of the above for the action if found guilty.
Commission Saamoi averred that duty free privileges enjoined by various concessions, government entities and other organizations are being misused.
“This is just one example, and we will be very decisive about it… and whoever else is caught in the same criminal act will face the full weight of the law.”The Customs Commissioner asserted.
The Customs Commissioner added that the action is tax eviction and it undermines revenue generation and significantly hurts free market competition.
All eyes are on the LRA regarding the outcome of its investigation of Aminata & Sons “misdirecting” of fuel belonging to LWSC.
So far, the management of Aminata & Sons has remained tightlipped on the ongoing LRA investigation and incessant media reports linking it to alleged bad business practices.
Speaking further, the government insiders made specific reference to the General Auditing Commission(GAC) Audit Report on the Japanese Petroleum Non-Project Grant in which Aminata & Sons and others were named for “unlawful and unfair act”.
For the benefit of the public, we now bring you key findings of the GAC Investigative Report as highlighted in its Transmittal Letter dated August 23, 2012 and addressed to President Ellen Johnson-Sirleaf and the leadership and members of the Legislature for perusal and prompt actions.
It could be recalled that the Government of Japan extended a grant of one billion, one hundred million Japanese Yen (ÂÂ¥1,100,000,000), to the Government of Liberia under a Grant Arrangement, provisions of which were conveyed in an Exchange of Notes dated March 8, 2011 between the Donor (Japan) and the Recipient (Liberia), for the purpose of contributing to the promotion of the economic and social development efforts by the Government of Liberia.
On the basis of information received that there were possible abuses in connection with the Japanese Grant, an investigation was conducted by the GAC to determine whether the Japanese Oil products delivered had been duly accounted for.
On August 30, 2011, a Memorandum of Understanding (MoU) was signed by and between the Ministry of Commerce and Industry (MoCI), consignee on behalf of the Government of Liberia and the Liberia Petroleum Refining Company (LPRC); the implementing agent for the monetization of the Japanese donated petroleum products.
At the time of the signing of the MoU, the Petroleum Non-Project Grant was valued at thirteen million United States Dollars (US$13,000,000.00) for the supply of 15,000 Metric Tons (MT) of petroleum products from the Government of Japan for monetization, for which proceeds would be used to support development initiatives in Liberia.
The GAC through the then Acting Auditor General, Mr. Winsley S. Nanka, requested LPRC, Aminata & Sons and the Ministry of Commerce to provide original invoices as well as other original supporting documentation to support the sale of the oil. However, LPRC, Aminata & Sons, and the Ministry of Commerce failed to provide the documents requested.
Due to the lack of evidence that the discount was passed down to consumers at the pump, GAC used the prevailing wholesale market rate to determine the revenue realized by Aminata & Sons. The Ministry of Commerce maintains the official wholesale market rate statistics.
At the official wholesale rate of US$4.22 and US$4.37 on the 4,196,343 gallons obtained by Aminata & Sons during the transaction, the total revenue derived from the petroleum sales by Aminata and Sons Inc., the local distributor selected by LPRC to monetize the product was US$17,889,454.11.
Therefore, after considering the threshold amount deposited, storage fees, port charges, and administrative cost paid as well as the assumed 10 percent commission payable to Aminata & Sons, Inc., these outlays amounted to US$12,101,320.10, Aminata & Sons, Inc., thus earned in total US$5,788,134.01 beyond the reasonable assumed commission.
MOCI contends that Aminata & Sons sold the donated products at the discount price to other importers/wholesalers (West Oil, MOTC, and Petro Trade), as evidenced by the "invoices" provided.
However, there was no evidence provided by the parties involved in the transactions to indicate that the discount was passed down to the consumers, an important part of the MoU between MoCI and LPRC, and LPRC and Aminata & Sons.
The failure to give due consideration to this discount factor serves as a basis for which Aminata and Sons is liable to pay the wholesale price for the petroleum products.
Former MD T. Nelson Williams of LPRC failed to award the Japanese Oil Grant contract to Aminata & Sons on a commission basis, given that the proceeds of the grant was intended to contribute to the promotion of the economic and social development efforts of the Government of Liberia.
A reasonable commission should have been ten percent on the sales of US$17,889,454.11, amounting to US$1,788,945.00 and payable to Aminata & Sons.
The Ministry of Commerce, in its response, asserted that "The amount of the proceeds to be deposited shall not be less than a half of the total yen disbursement paid with respect to the purchase of the products", referred to in sub-paragraph (1) of paragraph 2, unless otherwise agreed between the authorities concerned of the two Governments. This assertion by MoCI's established a floor, which is the minimum deposit requirement by the Japanese Government.
The net proceeds were required for economic development in Liberia. AS such, the MOU between MoCI and LPRC on the one hand and the MOU between LPRC and Aminata & Sons on the other was not restricted to that clause.
Therefore, it was incumbent upon former Minister Miata Beysolow and former MD T. Nelson Williams to protect the interest of the Liberian people by requiring Aminata & Sons to deposit as high as 90 percent of the net proceeds into Government account for the development of the country.
LPRC did not follow the Public Procurement and Concessions Act, 2005 when it contracted Aminata & Sons to sell the donated oil on its behalf. The lack of a competitive bidding process denied assurance that value for money was achieved in the sale of the donated oil.
For MD William “violated” Section 48(1) of the Public Procurement and Concessions Act for not subjecting the contract to monetize the Japanese Oil Grant to competitive bidding and also for not seeking No Objection from the PPCC in awarding the contract to Aminata & Sons.
LPRC, in its response to the “violation” of the PPC Act stated, that "the 1989 statute grants LPRC the sole right therefore there was no need to request "no objection" for single sourcing Aminata and sons, Inc. for the sale/distribution of the Japanese donated petroleum products as required by the PPC Act section 55 referenced in the draft report."
However, LPRC's contention that the Act establishing the Company grants it the sole right, explicitly, to import, distribute and grant franchise to any person or business establishment with the expressed desire to sell petroleum products on the Liberian market does not absolve LPRC from adhering to the Public Procurement and Concession Act provisions which regulate all forms of public procurement and concessions within Liberia.
It is also significant to note that LPRC is a State-Owned Entity (SOE) that is governed by the PPC Act. Section 1(e), of the PPC Act on Scope and Application, states among others that the Act shall apply to "all public enterprises which are wholly owned by the State or in which the state has a majority interest."
It was noted that the products were also sold on the Liberian market at the prevailing market rate without taking into consideration the gift element of 21.19 percent as indicated in MOCI's Japanese Donated Petroleum Product Cost Benefit Analysis. From my calculation, the gift element amounted to US$2,749,861.87. There was no evidence to indicate that this gift element was reflected at the pump.
The MoCI's cost-benefit analysis did not call for a discount to be passed to the distributor, but rather a discount to be passed to the consumers at the pump. However, Mr. Nanka analysis revealed that the former Minister of Commerce Beysolow granted Aminata & Sons a deep discount of 35 percent, amounting to US$4,584,292.90.
Former MD Williams and Commerce Minister Beysolow failed to protect the financial interest of the GoL by not disclosing and ensuring that the net proceeds of the sale less a reasonable commission was deposited into government coffers. Commerce Minister Miata Beysolow did not provide any evidence that MoCI monitored the MoU entered into with LPRC, to ensure that its terms and conditions were enforced by LPRC.
Aminata & Sons, with the acquiescence of, and collaboration with, MoCI and LPRC, denied GoL optimum revenue from the monetization of the oil products. Overall, both financial and administrative activities associated with the oil grant were characterized by a number of financial irregularities and major control deficiencies.
Therefore, he recommends that Aminata & Sons should be made to deposit an additional US$5,788,134.01 into Government Account # 0220630001709 at the Central Bank of Liberia, as the excess income which unjustly accrued to Aminata & Sons as a result of the transaction. This amount includes US$16,000.00 set aside by Aminata and Sons for external audit purposes, as there is no evidence that an audit was conducted, as supported by LPRC's Final Report.
He further recommends that Aminata & Sons, Inc., should be made to deposit the aforesaid amount within thirty (30) days from the date of submission of this report to the National Legislature, and submit a copy of the deposit slip to the Office of the Auditor General for validation. Failure to do so, the Ministry of Justice should institute debt collection action against Aminata & Sons.
Henceforth, all commodities (oil, rice, etc) grant agreements between the Japanese Government and the Government of Liberia should be on a commission basis payable to the distributor of the product not to exceed ten percent of the wholesale price of the product; LPRC's Managing Director T. Nelson Williams should be censured by the President of Liberia for not protecting the interest of Government of Liberia by ensuring that proceeds of the sales less a reasonable commission was deposited in the account of the Government of Liberia; The Minister of Commerce and Industry Beysolow should be censured by the President of Liberia for not monitoring the deal to ensure that the terms and conditions were enforced by LPRC; Commerce Minister Beysolow should be censured by the President of Liberia for not ensuring that Aminata & Sons passed down to consumers a discount of 21.19 percent reflected in the pump price of petroleum sold on the Liberian market as stated in MoCI's cost-benefit analysis; Beysolow did not provide any evidence that MoCI monitored the MoU entered into with LPRC, to ensure that its terms and conditions were enforced by LPRC.
Aminata & Sons, with the acquiescence of, and collaboration with, MoCI and LPRC, denied GoL optimum revenue from the monetization of the oil products. Overall, both financial and administrative activities associated with the oil grant were characterized by a number of financial irregularities and major control deficiencies.
Therefore, Mr. Nanka also recommends that Aminata & Sons should be made to deposit an additional US$5,788,134.01 into Government Account # 0220630001709 at the Central Bank of Liberia, as the excess income which unjustly accrued to Aminata & Sons as a result of the transaction.
This amount includes US$16,000.00 set aside by Aminata and Sons for external audit purposes, as there is no evidence that an audit was conducted, as supported by LPRC's Final Report. Aminata & Sons, Inc., should be made to deposit the aforesaid amount within thirty (30) days from the date of submission of this report to the National Legislature, and submit a copy of the deposit slip to the Office of the Auditor General for validation.
Failure to do so, the Ministry of Justice should institute debt collection action against Aminata & Sons. Henceforth, all commodities (oil, rice, etc) grant agreements between the Japanese Government and the Government of Liberia should be on a commission basis payable to the distributor of the product not to exceed ten percent of the wholesale price of the product; former LPRC's Managing Director Williams should be censured by the President of Liberia for not protecting the interest of Government of Liberia by ensuring that proceeds of the sales less a reasonable commission was deposited in the account of the Government of Liberia; The Minister of Commerce and Industry, Beysolow should be censured by the President of Liberia for not monitoring the deal to ensure that the terms and conditions were enforced by LPRC; Commerce Minister Beysolow should be censured by the President of Liberia for not ensuring that Aminata & Sons passed down to consumers a discount of 21.19 percent reflected in the pump price of petroleum sold on the Liberian market as stated in MoCI's cost-benefit analysis; v Promoting Transparency, Accountability, Integrity and Fiscal Probity.
Former Commerce Minister Beysolow and former LPRC Managing Director Williams should be censured by the President of Liberia for awarding a deep discount of US$4,584,292.90 to Aminata & Sons without any basis; former LPRC's Managing Director Williams should be censured for violating Section 48(1) of the Public Procurement and Concessions Act by not subjecting the contract to monetize the Japanese Oil Grant to competitive bidding and also for not seeking No Objection from the PPCC in awarding the contract to Aminata & Sons. The breach of the PPC Act is punishable under Section 138 (1) of the PPC Act.
Source: By Heritage
