Senate wants corporation shielded from threats of receivership by creditors

Senate wants financially- troubled National Oil Corporation of Kenya (Nock) cushioned from receivership threats over a Sh5.5 billion debt, inclusive of interest, owed to two commercial banks.

Last week, the two lenders approached National Treasury to allow them to appoint an interim manager to assist in recovery of the money.

Nock owes KCB Group Sh4 billion, while Stanbic is claiming Sh1.5 billion.

Narok County Senator Ledama Olekina yesterday told the Senate’s Committee on Energy and Petroleum they would be failing in their responsibilities if they did not prevent the strategic government corporation from being “auctioned.” by KCB Group and Stanbic Bank Limited.

“So I would wish that we can take over that matter in this committee, so that we can call for those people and demand answers from them so that we save that company from being auctioned out to people,” he said.

Last year, the Senate directed Auditor General Nancy Gathungu to conduct a forensic audit of the loans that Nock borrowed from KCB and Stanbic Bank.In arguing his case, Olekina, who called out for the former Nock management to be accountable, said other state corporations, among them Kenya Power  had even higher debts (Sh120 billion) than Nock.

“We also need to follow up as per the constitution, which is clear in article 226 (5) on the responsibility because the former management is the one that led that company into that debt, so it must be called so we know how this arrangement of finances was made,” he said.

Working committee

The National Treasury has constituted a working committee comprising officials from Treasury, the Petroleum ministry, Nock, the State Corporation’s Advisory Committee and the two banks mandated to look into ways of repaying the loan and steering Nock out of its loss-making territory.

Nock took the loans, which attracted the interest to buy petroleum product stocks.

Placing Nock under administration would set back current efforts by the government to create a 90-day strategic oil reserve.