Calls for Fraud Squad to probe PCJ at PAC

A recommendation was made at Tuesday's sitting of the Public Accounts Committee of Parliament (PAC) for the Fraud Squad to be called in to investigate another financial irregularity that was uncovered by the Forensic Audit team, at the Petroleum Corporation of Jamaica (PCJ).

Service stations

This time, it involves PETCOM Service Stations owned by the PCJ.

The auditor found that of the five that were owned by the Corporation, it failed to collect rent and other fees on two of the properties.

In one instance the company was not even aware that it owned the service station, reportedly due to poor documentation; and so no rental fee has been collected since 2004.

However, the most startling irregularity was revealed in relation to the sale of a PETCOM station located in St. Catherine.

Scandalous sale

According to PCJ records, the company purchased land and constructed a service station in 2001 at a cost of $15 million.

In 2005, the PCJ was approached by two individuals interested in buying the service station for one million dollars.

It is understood that the PCJ lent the individuals the money to purchase the service station.

The money should have been repaid in the form of mortgage payments but this was not done.

The PCJ therefore forfeited all of the $15 million it spent on the property.

The auditor in his report challenged the transactions, calling them unreasonable as the PCJ was the only one spending.

The following year, the owners of the property asked the PCJ to buy back the property to which the PCJ agreed.

It was re-purchased for $14 million.

However, after repaying debts and other arrears, the former owners received $1.8 million in cash.

Not the norm

Acting Group Managing Director, Nigel Logan defended the PCJ, arguing that this practice was not the norm.

He promised that attempts will be made to recover the lost funds.

“After receiving the report after it was discussed by the Board and the audit committee review the documentation to verify whether these transactions really took place and the timing of the transactions and so forth,”

“I cannot say that this is the norm, it is clear and apparent to me that the PCJ needs to recover money from somebody in relation to these transactions. As a matter of fact I have asked our legal officer to investigate if and who we could recover some of these funds from,” Mr. Logan said.