BOST, NPA, Movenpiina, ZUPOIL and others sued over sale of contaminated fuel

The Plaintiff avers that Mr Boateng, acting on behalf of BOST, had no legal authority to approve and should not have approved the sale of the adulterated products to Movenpinaa since the firm was not licensed to engage in the downstream petroleum industry by the NPA.

The Plaintiff says that the Movenpinaa subsequently sold to Macwest, two million litres at GHS1.32 per litre for GHS2,640,000, making a profit of GHS640,000 having purchased the product at GHS1 per litre in a scheme to cause huge financial loss to the state.

Based on all the information stated, counsel for the plaintiff, Godwin Kudzo Tameklo, who filed the case on Thursday July 6, indicated in the statement of claim that the entire transaction was “illegal, fraudulent, and with potential to cause financial loss to the state”.

Strategic Thinkers Network-Africa is therefore seeking the following reliefs:

1. A declaration that the transaction for the disposal of the contaminated fuel from the 1st Defendant acting through the 2nd Defendant to the 3rd and 4th Defendants is illegal, unlawful and in clear violation of Section 16(2)(c) of the Page | 6 Public Procurement Act, 2003(Act 663) as amended by the Public Procurement (Amendment) Act, 2016 (Act 914).

2. A declaration that the decision to single source the sale of the contaminated fuel products to the 4th Defendant by the 2nd Defendant acting through the 3rd Defendant is in clear contravention of Section 35 and 40(1) of Public Procurement Act, 2003, (Act 663) as amended by the Public Procurement (Amendment) Act, 2016 (Act 914).

3. A declaration that the activities of the 4th and 5th Defendants in engaging in downstream petroleum activities without licenses is in violation of Section 11 of the National Petroleum Authority Act, 2005 (Act 691).

4. An order of the Honourable Court setting aside the entire transaction on grounds of illegality and fraud.

5. Costs, including the cost of legal representation.

6. Any other reliefs that this Honourable Court may deem fit.

Read the full writ below

1. The Plaintiff is a non-governmental organization registered as number 201702020602172 at the Registrar General Department with a primary focus on public interest advocacy.

2. Plaintiff says that, as a corporate citizen, it is obligated to defend the Constitution and laws of Ghana and to protect and preserve public property and expose and combat the misuse of public property, including public funds pursuant to Article 41 of the 1992 Constitution.

3. The Plaintiff says that the 1st Defendant is a statutory body set up under the National Petroleum Authority Act, 2005 (Act 691) with the power to regulate the petroleum downstream sector and to protect the interests of consumers and providers of petroleum products.

4. The Plaintiff says that the 2nd Defendant is a limited liability company registered under the laws of Ghana for the business of strategic storage and transportation of refined oil. Further, the 2nd Defendant is wholly owned, controlled and operated by the Government of Ghana.

5. The Plaintiff says that the 3rd Defendant was appointed by His Excellency the President of the Republic of Ghana as the acting Managing Director of the 2nd Defendant.

6. The Plaintiff says that the 4th Defendant is a sole proprietorship registered under the Registration of Business Names Act, 1962 (No. 151) as number BN 256792017.

7. The Plaintiff says that the 5th Defendant purports to be licensed and in fact carries out or engages in the trading, storage and transportation of petroleum products.

8. The Plaintiff says that on January 18, 2017, the 2nd Defendant Company, in public statements, claimed to have detected the adulteration or contamination of some petroleum products at its Accra Plains fuel depot.

9. The Plaintiff avers that the 2nd Defendant Company claimed that the said adulteration or contamination of the said petroleum products was caused by one of its employees who mistook a diesel fuel tank to be a gasoline tank and subsequently poured gasoline into that diesel fuel storage tank.

10. The Plaintiff says that the 2nd Defendant has claimed in public statements that as a result of the reckless miscalculations of its employee about four million, nine hundred thousand liters of (4,900,000) of petrol or gasoline was discharged into a storage tank containing seventy thousand (70,000) liters of diesel resulting in the contamination or adulteration of its products.

11. The Plaintiff avers that in a letter dated 19th May, 2017, one G. A. Asiamah wrote to the 3rd Defendant and falsely represented to the 3rd Defendant that Movenpinaa Energy was a legal entity engaged in the trading of petroleum products and that the said entity was interested in the acquisition of five million liters of contaminated fuel products from the 3rd Defendant’s Accra Plains Depot.

12. The Plaintiff avers that the said G. A. Asiamah failed and or neglected to disclose to the 3rd Defendant the very important fact that, at all material times, including at the time of writing his letter, Movenpinaa Energy was not a legal entity in existence or that it was not registered by the National Petroleum Authority to trade in petroleum products or engage in any form of business in the downstream petroleum sector of Ghana.

13. The Plaintiff avers that without investigating the background of Movenpinaa Energy and its standing with the 1st Defendant, the 3rd Defendant proceeded to approve the sale of “the entire 5m litres to MOVENPINAA at a unit price of GHC 1 per litre on credit” without public tender or auction for disposing public property.

14. The Plaintiff avers that the approval for the sale and purchase of the five million liters of so-called contaminated fuel products was granted the same day the 2nd Defendant received the letter from G. A. Asiamah expressing interest in the purchase of the said fuel and the on a credit basis.

15. The Plaintiff avers that the 3rd Defendant, acting on behalf of the 2nd Defendant, had no legal authority to approve and should not have approved the sale of the adulterated products to the 4th Defendant since the 4th Defendant was not licensed to engage in the downstream petroleum industry by the 1st Defendant.

16. The Plaintiff says that approving the sale of the 5 million liters of petroleum products to the 4th Defendant, an unincorporated and unlicensed entity on credit basis within hours of receiving the letter of expression of interest and without adopting any competitive tendering procedures to guarantee the best sale value for the State was reckless, illegal and negligent

17. The Plaintiff says that the 2nd Defendant, acting through its Managing Director, the 3rd Defendant, awarded the contract for the procurement of the five million liters of contaminated fuel product to the 4th Defendant without taking it through competitive tendering process, public tender or auction subject to reserve price that would have ensured value for money, competitiveness and transparency to the extent possible contrary to Section 16 and Section 84(b) and (c) of the Public Procurement Act, 2003 (Act 663) as amended by the Public Procurement (Amendment) Act, 2016 (Act 914) since there was no public tender or auction.

18. The Plaintiff says further that the 1st Defendant has categorically stated publicly that the 4th Defendant engaged in the downstream petroleum business when it had not been registered to carry out such business contrary to the National Petroleum Authority Act 691.

19. The Plaintiff avers the as at the time of filing this suit, both the 4th and 5th Defendants are not registered by the 1st Defendant and are still not entitled to engage in downstream petroleum business.

20. The Plaintiff says that unfortunately the 1st Defendant which is statutorily empowered to initiate regulatory action in the national interest to arrest illegalities such as have been occasioned by the combined and individual actions of the 2nd, 3rd, 4th and 5th Defendants has failed and/or neglected to take any action to cancel or set aside the sale of the adulterated or contaminated fuel to prevent damage to the interests of consumers and providers of petroleum products in the downstream as well as the huge financial loss to the state occasioned by the conduct of the said Defendants.

21. That the 1st Defendant in the Daily Graphic Wednesday, July 5th, 2017 edition have jointly with the Bureau of National Investigations exonerated the 3rd Defendant of any wrongdoing notwithstanding the earlier claim that 4th and 5th Defendants were unlicensed at the time of the transaction and has clearly demonstrated its intension not to apply sanctions against the other Defendants having absolved the 3rd Defendant of no wrongdoing.

22. The Plaintiff says that 2nd, 3rd, 4th and 5th Defendants have conspired and by fraudulent misrepresentation, illegally engaged in downstream petroleum business that has led to financial loss to the State and the 1st Defendant has failed to institute legal proceedings to cancel or set aside the said illegal sale hence the Plaintiff‘s action as the disposal was done without public tender or auction. 3rd Defendant confirmed he authorized the sale to only 4th Defendant on Atinka Fm.

23. The Plaintiff further avers that the fact of illegality in the sale of the petroleum products is unambiguously confirmed by a press release published in the Thursday, June 29, 2017 edition of the Daily Graphic by the 1st Defendant stating that “Additionally, the NPA has noted that Movenpinaa Energy and Zupoil are not licensed to undertake any commercial activity in the downstream petroleum industry. Their activities, therefore, infringe on Section 11 of the National Petroleum Authority Act, 2005, (Act 691)”.

24. The Plaintiff says that the entire transaction is therefore illegal, fraudulent and with potential to cause financial loss to the State and is therefore null and void and of no effect.

PARTICULARS OF FRAUD

• The 4th Defendant fraudulently represented expressly or impliedly to the 2nd Defendant at the time it expressed interest to procure the five million liters of petroleum products that it was duly incorporated as a company and/or had the requisite license to engage in the trade of petroleum products in the downstream sector when it knew same to be false;
• The 3rd Defendant knew or ought reasonably to have known that the representation was false and did not care whether it was true or false;
• The false representation got the 2rd Defendant to award the five million liters to the 4th Defendant when in fact same can only be done to a company duly registered with SSNIT Certificate and Ghana Revenue Authority certification.
• That the 4th and 5th Defendants were not legally licensed to engage in any downstream petroleum activities and the 2nd and 3rd Defendants recklessly did not care about their status under the law.

25. The Plaintiff avers that the 5 million liters of adulterated fuel was released Movenpinaa and Zupoil without having to pay a pesewa or any amount to the 2nd Defendant and the state for the contaminated petroleum products and will not suffer any financial loss should the contract of sale be set aside.

26. The Plaintiff says that the 4th Defendant subsequently sold to 5th Defendant ,MACWEST, two million litres at Ghc1.32 per litres for GHc 2,640,000 making profit of Ghc 640,000 having purchased the product at Ghc 1 per litre in a scheme to cause huge financial loss to the State.

27. WHEREFORE the Plaintiff claims against the Defendants jointly and severally as follows:

1. A declaration that the transaction for the disposal of the contaminated fuel from the 1st Defendant acting through the 2nd Defendant to the 3rd and 4th Defendants is illegal, unlawful and in clear violation of Section 16(2)(c) of the Public Procurement Act, 2003(Act 663) as amended by the Public Procurement (Amendment) Act, 2016 (Act 914).

2. A declaration that the decision to single source the sale of the contaminated fuel products to the 4th Defendant by the 2nd Defendant acting through the 3rd Defendant is in clear contravention of Section 35 and 40(1) of Public Procurement Act, 2003, (Act 663) as amended by the Public Procurement (Amendment) Act, 2016 (Act 914).
3. A declaration that the activities of the 4th and 5th Defendants in engaging in downstream petroleum activities without licenses is in violation of Section 11 of the National Petroleum Authority Act, 2005 (Act 691).
4. An order of the Honourable Court setting aside the entire transaction on grounds of illegality and fraud.
5. Costs, including the cost of legal representation.
6. Any other reliefs that this Honourable Court may deem fit.

DATED AT THE LAW OFFICES OF AYINE & FELLI No. 3 MULBERRY STREET, ADJACENT LION HOUSE, CHRISTIAN CENTER EAST LEGON, ACCRA THIS 6TH DAY OF JULY, 2017.

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GODWIN KUDZO TAMEKLO ESQ.

LAWYER FOR THE PLAINTIFF

LICENCE NO: GAR LIN 17297/17