The GH₵3 billion lie: We are confident KPMG will vindicate us – SML

Strategic Mobilisation Ghana Limited (SML), the company that signed the shady revenue assurance contract with the Ghana Revenue Authority (GRA) and the Ministry of Finance has said it is confident that the appointment of tax auditing firm, KPMG, to audit its activities will confirm it’s integrity and the value of the service it renders.

SML also said the audit will help clear all doubts surrounding its operations.

“We remain resolute in upholding the highest business standards and welcome the scrutiny that this audit would bring. We are confident that the findings will confirm the integrity of the collaboration with GRA and the Ministry of Finance and provide ample evidence of the value we provide citizens,” SML said in a press statement.

The organisation also says making the findings from the investigations public would ensure “transparency and accountability.”

“SML awaits the result of the audit, as it will help establish a clear and accurate picture of our operations. We hope that the report’s findings will be made public, allowing for transparency and accountability,” the statement released on January 3, 2024, stated.

SML’s statement comes barely 24 hours after President Akufo-Addo ordered an immediate suspension of the contracts between the Ministry of Finance and the Ghana Revenue Authority (GRA) and Strategic Mobilisation Ghana Limited (SML). This directive follows The Fourth Estate‘s investigation into how the GRA and the Ministry of Finance signed a shady deal with SML, an offshoot of a timber company in Ghana. The downstream petroleum sector contract earns SML up to GH₵24 million a month.

The investigation also revealed that SML has been awarded an expanded consolidated contract worth nearly US$100 million a year for revenue assurance that will now include the upstream petroleum and gold mining sectors.

The Fourth Estate investigations also showed that SML had made false claims that it was checking under-reporting, diversion and dilution in the country’s downstream petroleum sector. When The Fourth Estate team pointed the false claims to the company, the Managing Director, Christian Tetteh Sottie, admitted the company was not into those services.

“Oh no, we are not involved in diversion. We are only at the depots. If the thing [petroleum product] is lifted, we don’t know if [it is diverted],” Mr. Sottie said.

President Akufo-Addo “also directed the Ministry of Finance and the Ghana Revenue Authority to suspend the performance contract pending the submission of the audit report, including any payments presently envisaged under its terms.”

Meanwhile, two leading activists in the natural resource sector have opposed the selection of a tax audit firm, KPMG, to investigate the questionable revenue assurance contract the Ministry of Finance and the Ghana Revenue Authority (GRA) have signed with Strategic Mobilisation Ghana Limited (SML).

Bright Simons of IMANI Africa and Benjamin Boakye of the Africa Centre for Energy Policy (ACEP) say KPMG, which also provides services to the GRA might be caught in a conflict of interest situation and may not have the right powers to conduct a thorough audit.

For Bright Simons, the vice president of IMANI, the firm should reject the president’s request to save its reputation.

“KPMG’s practice oversight bosses should prudently preserve the firm’s reputation and drop this assignment. This issue is a hot political potato right now. The nature of the allegations requires an in-depth look by state bodies with the right powers and independence. KPMG has neither,” Mr. Simons stated on X(formerly Twitter).

The Executive Director of the African Centre for Energy Policy, Ben Boakye, also cast doubts on KPMG’s ability to do independent work.

“KPMG has its integrity at stake if it accepts this job. It is a client of GRA and its investigation against the leaders of one of its large portfolios is exceedingly suspicious. Simply unethical,” Mr Boakye stated.

In a related development, former Auditor-General, Daniel Domelevo, has said that the Office of the Special Prosecutor should have been made to investigate the shady SML contract.

Mr Domelevo says the office was established to look into such matters.

“The issue has been reported already to the OSP, so he sits with the case,” he said in an interview on Joy FM. “I don’t know why we will not allow the OSP to do the audit instead of engaging KPMG to do what state institutions are mandated to do.”