Energy Minister Mmamoloko Kubayi. Picture: TREVOR SAMSON
Energy Minister Mmamoloko Kubayi. Picture: TREVOR SAMSON

Criminal charges are required against former executives of the Strategic Fuel Fund who sold off 10-million barrels of SA’s strategic oil reserves at bargain basement prices.

Energy Minister Mmamoloko Kubayi said the Department of Energy was considering laying charges against those involved and would also institute a forensic investigation to trace the flow of money arising from the transaction which was not approved by either the Strategic Fuel Fund board nor the board of its parent company, the Central Energy Fund (CEF).

The Treasury was also not notified of the contemplated transaction as required by the Public Finance Management Act.

The sale took place between December 2015 and January 2016 through a closed tender process, and the CEF board only became aware of it in May 2016 when it discovered the $280m sitting in Strategic Fuel Fund bank accounts.

Kubayi told Parliament’s portfolio committee on energy on Tuesday that among the problems that facilitated the transaction were that the CEO, chief operating officer and legal adviser of the Strategic Fuel Fund were the same person, so there were no checks and balances to objectively evaluate it.

The minister said other people appeared to be involved and this would have to be investigated, as well as what happened to the money.

She said the report into the transaction — which made it clear that it was a sale of the strategic oil stocks and not a stock rotation as claimed by former energy minister Tina Joemat-Pettersson — could not be given to MPs as she had received legal advice that this could contaminate the legal case.

This initial report only looked at what happened and did not trace the money.

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