News
Tainted South African trader now mediates in CPC-Fujairah dispute
A tainted South African oil trader has intervened to settle a pricing dispute between the Ceylon Petroleum Corporation (CPC) and Fujairah Petroleum Company where the former has been billed twice the original fuel cost for six different shipments.
After the first shipment was received, the CPC found that the price of US $ 54 per ton has been increased by a further US$ 54. The additional amount has been entered into the contract surreptitiously, according to CPC sources. However, the Gulf firm has filed action in the Commercial Courts in Colombo and sought arbitration before a tribunal in Singapore.
Against the backdrop of this imbroglio, Michael Hacking, Chief Operating Officer of Mocoh, a Swiss-based oil distribution, logistics and trading company acting on behalf of the UAE supplier, arrived this week for further talks with the CPC, which is desperate to avoid litigation.
Mr. Hacking was among individuals and companies in South Africa alleged to have received kickbacks under the UN’s oil-for-food programme in Iraq under the former Saddam Hussein regime. Subsequently a South African commission was asked to report on these alleged payments. The full report is yet to be released, according to South African media reports.
His Colombo visit comes a week after another Mocoh official, Manisha Heerasing, met CPC officials for talks.
The dispute is in the pricing. The CPC agreed to a price of Singapore Platts + US$ 54 per ton for six shipments of low sulphur fuel oil but later altered it to add another $54 per ton (total of Platts+$108 per ton). Platts is a standard price mechanism used by most suppliers.
However after one shipment was made, it was discovered that the additional $54 per ton was surreptitiously included in documents sent to the Cabinet. The CPC was then forced to revert to the earlier Platts +$54 per ton deal, to which Fujairah was opposed, leading to the fresh negotiations.
A top CPC official, who did not want to be named, told the Sunday Times that CPC Managing Director L.E. Susantha Silva met Mr. Hacking this week but his proposal was similar to the one discussed by Ms. Heerasing.CPC Commercial Manager C.P. Samaraweera said the matter was now before the Attorney General and declined to comment further.
According to South African news reports, the UN investigation found that on at least two occasions, the Iraqis paid Mr. Hacking illegal kickbacks amounting to $ 94,000 and $ 480,000 for his role in the oil-for-food programme.
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