admin's picture

Irregular transactions at South Pacific Oil

By Moffat Mamu HONIARA, Solomon Islands (Solomon Star, June 23, 2010) - AN audit inquiry into three "unauthorised" transactions involving millions of dollars by South Pacific Oil (SPO) managing director Mike Hemmer is underway.

This followed an order SPO board obtained from the High Court on Monday after Mr Hemmer refused to cooperate with auditors.

SPO board chairman Joses Tuhanuku said the transactions were entered into with GRP & Associates, a company owned by Mr Hemmer, without the knowledge of his board.

SPO, the country’s leading fuel supplier, is owned by National Provident Fund (80%) and GRP & Associates.

Under an agreement between the two shareholders, GRP & Associates was engaged to manage the company.

Mr Tuhanuku said the board has instructed the company’s internal auditor Sarah Azeem to inquire into three commercial transactions which SPO had entered into with GRP & Associates Limited.

"The matter is so serious because large sums of money were involved and the board wants to get to the bottom of these unauthorised transactions," Mr Tuhanuku said.

"We believe these unauthorised transactions were made by Mr Hemmer without our knowledge."

After Mr Hemmer refused to cooperate, the board sought a court order that requires the management and staff to cooperate by providing all relevant documents required for the investigation which was set up by the SPO board last week.

Mr Hemmer, who had resigned his position as chairman of the Solomon Islands Chamber of Commerce last week, had refused to allow the company secretary Greg Thompson and SPO’s internal auditor, Sarah Azeem, to enter SPO’s offices on Monday to begin investigation.

"It was disappointing that the board had to go to court to get Mr Hemmer to what he is already legally obliged to do," Mr Tuhanuku said.

"However, the matter is so serious and the sums of money involved so large the board has determined it must do everything in its power to get to the bottom of this."

Mr Tuhanuku said he wanted to reassure SPO’s customers and suppliers that the company’s day to day operations were not affected and SPO would be carrying on business as usual.

He said the board passed a resolution last Thursday directing the company’s internal auditor to inquire into three commercial transactions which SPO had entered into with GRP & Associates Limited.

The board also authorised Mr Tuhanuku to stand down any officer or employee of the company including Mr Hemmer for refusing any reasonable request by the internal auditor for access to any company document, account, record or premises.

Mr Tuhanuku said the transactions include two leases by SPO of land or residential property which GRP & Associates owned in Gizo, Western Province and at Tasahe, Honiara.

The third transaction is a lease by SPO of a barge the LC Alcol believed to be jointly owned by GRP & Associates Limited and John Beverly former director of NPF board.

Mr Tuhanuku said the board had no knowledge about these transactions and there were no records and copy being given to them.

"The board has also directed the SPO internal auditor to inquire and report on any other contract, written or otherwise, purportedly entered into between SPO and GRP & Associates Limited," Mr Tuhanuku said.

The investigations will include but not limited to a report on all monies from the company’s accounts, in respect of the contract and all board and or shareholder minutes wherein that contract or any payment in that regard was discussed.

It will also cover any debts incurred by any past or present director or company officer and any other matter concerning the financial affairs of the company which the internal auditor shall in her discretion determine should be reported to the board.

The SPO board has given its internal auditor 14 days to provide an interim report to each member of the board as to the progress of her inquiry.

Mr Tuhanuku said Mr Hemmer is now willing to cooperate with the inquiry after the board obtained the court order.

He also said any decision to terminate Mr Hemmer will base on the outcome of the inquiry.

Asked for comments last night, Mr Hemmer said he welcomes the internal audit into their accounts by the internal auditor.

"I have no problem with the inquiry. We are prepared to open our books to allow them to look at it professionally," he said.

Mr Hemmer however, said the term "unauthorised payment" is wrongfully used in this case, adding the board is trying to "make a big thing out of it".

Rate this article: 
No votes yet

Add new comment