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Sahara Energy Breaks Silence....Over Transfer Pricing, Fraud Charges

By Mark Boye
Business & Finance Sahara Energy Breaks Silence....Over Transfer Pricing, Fraud Charges
DEC 18, 2014 LISTEN

Sahara Energy Group has broken its long silence over various allegations on tax evasion, fraud and forging of sham companies in its operations. The Nigerian-owned oil company has been under fire for some time now for allegations of fraud, transfer pricing and dubious deals in Nigeria, Switzerland and Ghana.

But Sahara Energy has come out to dismiss such claims, stating that it never indulges in transfer pricing or any dubious deals that would ruin its huge investments across the globe.

The Berne Declaration, a Swiss non-governmental organization, in a report, cited Sahara Energy and other oil companies in Nigeria for widespread fraud.

The report released in November 2013, and titled “Swiss Traders' Opaque Deals in Nigeria,” alleged that Sahara Energy and other Nigerian oil companies had established subsidiaries, called letter-box companies, in Geneva, Switzerland, with no real business activities.

It said these companies established the subsidiaries, primarily for tax advantages and also for easy access to international capital.

The practice, which is commonly referred to as transfer pricing, is said to be causing resource rich developing countries to lose billions of dollars every year.

But Bethel Obioma, Sahara Energy's Corporate Affairs Director, in charge of Nigeria and Ghana, responding to The Enquirer probe recently, dismissed such claims, saying it appears that there was a conspiracy by detractors to destroy the Sahara brand.

He said the company has established its presence well in many countries across Africa and this has angered some detractors to pull it down, vowing that no amount of machinations by any group can destroy the proud African oil company.

Obioma explained that it sometimes keeps silent over some of the allegations but because of the tendency to tarnish its image, it deemed it appropriate to respond.

Obioma alleged that the Berne Declaration report was sponsored by detractors to destroy Sahara, adding the company has a track record of credibility and will not cut corners to benefit from any deal.

He wondered why the Swiss authorities would be silent on Sahara's illegalities if indeed it was indulging in fraud, pointing out that its offices could have been locked long ago.

According to Obioma, relevant Nigerian authorities had fully investigated such issues raised by the Berne Declaration, and Sahara Energy was exonerated of any allegation of wrongdoing.

“Sahara Energy is engaged in a lawful trade and, needless to say, deplores any abuse of the Nigerian fuel subsidies regime,” he reiterated.

Touching on issues in Ghana, Obioma said Sahara Energy's track record in Ghana is an ample testimony of its seriousness in the petroleum industry.

In July 2014, Ghana's Legislature ratified a Petroleum agreement among the Government of Ghana, the Ghana National Petroleum Corporation (GNPC) and the Sahara Energy Fields, as well as other oil companies, for the exploration, development and production of hydrocarbons in the Shallow Water Cape Three Points Block offshore.

The Africa Centre for Energy Policy (ACEP) however raised concerns that the companies lacked the credibility and capacity to operate in the fledgling upstream oil sector.

ACEP at a press conference held on 16th September 2014 in Accra, said the contracts were open to corruption, rent seeking and lacked transparency.

It said the oil companies were start-ups and do not have the capacity to engage in any oil business in the country, adding, some of them were established between June 2013 and February 2014.

Even-though, the Ministry of Energy and Petroleum debunked the ACEP allegations, explaining that the award of the contracts to the eight companies was negotiated within the existing legal and regulatory frameworks of Ghana.

The ministry explained that due diligence was done on the companies by an evaluation committee, made up of the energy ministry, Ghana National Petroleum Corporation (GNPC) and the Petroleum Commission (PC) before the contracts were approved by cabinet for ratification by parliament.

Sahara Energy's Corporate Affairs Director said he has full confidence in Ghana's petroleum contracts', adding he does not believe that due diligence was not done on the company before it was allocated a block.

He said the company had long been established in Ghana in the early 2000s and had performed creditably well in the downstream sector before Ghana first struck oil in the Jubilee fields in 2007.

Obioma also denied that in 2010 Sahara Energy, through Refinee Petroplus, evaded some statutory payments and licensing fees in Ghana for importing some 600,000 brass crude worth $48 million into the country.

He said the issues regarding Sahara Energy are always overstretched and regurgitated to paint a bad picture of the company.

He reiterated that, as a leading oil and gas company in the sub-region, Sahara will continue to do good business at an arm's length and will continue to support the government of Ghana in meeting its energy needs.

Checks at the Ghana Revenue Authority (GRA) indicated that the company has a clean sheet of record in terms of its tax obligations.

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