Claim of tackling under declaration, diversion and dilution was just an advertisement – SML

‘Revenue assurance’ company, Strategic Mobilisation Limited (SML) Ghana, has said its claim of tackling under declaration, diversion, and dilution in the downstream petroleum sector was only for purposes of advertisement.

The Director of Support Services at SML Ghana, Yaa Serwaa Sarpong, said on Joy FM’s news analysis programme, Newsfile, that those services it had listed on its website were not part of the services it was performing for the Ghana Revenue Authority (GRA).

“A website is a place that companies advertise what they can do,” she said. “They tell potential clients this is what we do. It is not a scope of work of the contract.”

When the host, Samson Lardi-Anyenini, asked if they were speaking in “general terms,” Ms. Sarpong responded “yes”.

Ms. Sarpong’s comments follow a statement from the presidency on KPMG’s audit of the GRA-SML contract. The statement, released on April 24, 2024, confirmed several anomalies in the revenue assurance contracts that the GRA had signed with SML as revealed by The Fourth Estate in December 2023.

As part of an investigation into the circumstances surrounding the contracts between GRA and SML, the team from The Fourth Estate pointed out false claims the company had made on its website that “SML Digitalisation of downstream petroleum product measurement has stem (sic) the tide of under-reporting, diversion and dilution of fuel products and general non-compliance in the petroleum industry sector.”

SML later deleted the false claims on its website after its managing director, Christian Tetteh Sottie, was interviewed by The Fourth Estate on its contracts with the GRA. In that interview, he confirmed that the company was not involved in the prevention of diversion.

Two years before the interview in 2023, Mr Sottie had told the Ghanaian media that SML had raked in GHS1 billion in revenue that would otherwise have been lost to the state due to leakages.

“Prior to the introduction of SML, leakages were as a result of the diversion of petroleum products for re-export back to the domestic market and also the under-declaration of the volumes lifted for the domestic market,” he said.

Interestingly, the statement from the presidency on the back of the KPMG audit indicated that there might be underreporting, under-declaration and potential revenue leakages.

Meanwhile, President Nana Akufo-Addo has ordered a renegotiation of the downstream petroleum audit contract SML has with the GRA.

Until the suspension of the contract, SML was paid based on the volume of petroleum products recorded every month and it has so far been paid over GHS1 billion under the contract, according to KPMG audit findings.

The president has directed that payments to SML under the various contracts with GRA must be changed “from a variable to a fixed structure.”

He has also tasked the GRA and the Ministry of Finance to consider terminating the contract for transaction audit and external price verification services, which according to KPMG, have only been partially fulfilled by SML and are “redundant” since GRA’s ICUMS [Integrated Customs Management System] is already providing that service.

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