Accra, Ghana, February 19, 2019//-The Chief Executive Officer of the Ghana National Petroleum Authority (GNPC), Dr. K.K Sarpong and the board chairman of GNPC, Freddie Blay have engaged in ugly corporate practices debasing the image of the state-owned oil production company.
While Dr Sarpong is accusing Mr Blay of undermining his authority, the board chairman also accused the CEO of engaging in clanism, cronyism and mismanagement at the company.
Read a copy of a letter by Dr. KK Sarpong to Freddie Blay
MR. FREDERICK W. BLAY
CHAIRMAN
GNPC BOARD OF DIRECTORS
Dear Mr. Blay,
GNPC
RE: RECRUITMENT OF PROCUREMENT MANAGER AT GNPC
February 5, 2019
I am in receipt of a copy of your memo dated 30th January 2019, (which incidentally bears a despatched stamp dated 5th February 2019 and received in my office today 5th February 2019), to the Chief Finance Officer in respect of the above subject.
It is curious to note that the copy addressees in the memo under reference are the same copy addressees in
my memo to the Chief Finance Officer dated 4th February 2019, announcing placement of the procurement function directly under the office of the Chief Executive.
It has come to my notice that some rather hurriedly arranged “emergency” Board meetings were held on 29th and 30th January 2019 while I was away on official duty abroad.
It would have, at least been considerate on your part, if you had indicated to me that a Board meeting was going to take place even if the subject matter would or would not concern me.
From the account I have received, the Board did not take a decision to direct the Chief Finance Officer to headhunt a Procurement Manager. Even if the Board did, that would constitute an anomaly given that the Chief Executive has the responsibility for hiring all employees and not the Chief Finance Officer, Chairman of the Board nor the Minister for Energy.
It is also important to underscore the fact that the wish of the Chairman is NOT the wish of the entire Board if consensus is not reached. I have, in a letter dated 4th February 2019 to the Honourable Minister for Energy, and
copied to your good self offered justification for using competitive selection interview rather than headhunting for a Procurement Manager.
I have also indicated in that correspondence that the process for recruiting a Procurement Manager through
competitive selection has already begun even before your memo of 30th January, 2019, and that arrangements have been put in place for interviews to commence on Wednesday, 6th February 2019.
You stated in your memo under reference that I have on several occasions indicated to the Board and to other stakeholders that the role of the Chief Finance Officer puts her in charge of the procurement function. The above statement, whether attributable to me or not, would require review by any astute manager in response to changing conditions in the business environment.
One such condition is the negative observations on the performance of the Corporation’s procurement function by the Central Tender Review Committee, Public Procurement Authority, and internal and external auditors of GNPC
which yourself and the Minister for Energy have alluded to.
I have also seen only recently some inefficiencies in the delivery of the procurement function. The Chief Finance Officer, Mrs. Comfort Aniagyei who I have placed in charge of procurement is the one I hold responsible for the reported dismal performance.
I would be extremely surprised if the Chairman of the Board would seek to obstruct the Chief Executive’s decision to reorganize the procurement function to give him effective control over it to ensure improved delivery. I wish to draw your attention to the fact that as the head of the procurement entity, the Chief Executive has ultimate responsibility under the Public Procurement Act Act, 2003 (Act 663) and its amendments for infractions
thereof.
GNPC’s operative organogram gives direct supervision of the procurement function to the General Manager (Administration) who reports, however, to the Chief Finance Officer. Having oversight of the procurement function does not make the Chief Finance Officer the appointing authority under the rules and regulations of GNPC. I wish to
reiterate that the responsibility for hiring personnel lies within the purview of the Chief Executive and not the Chief Finance Officer.
I have already advised Mrs. Comfort Aniagyei, Chief Finance Officer that she has no mandate to recruit personnel,
notwithstanding your directive unless I expressly instruct her to do so. I wish to state emphatically that any appointment of a Procurement Manager by the Chief Finance Officer which has not been sanctioned by me will be nullified, your directive notwithstanding.
In line with good corporate governance practices, ordinarily, a Board Chairman’s contact with an organization is through the Chief Executive, the Board Secretary and the Internal Auditor. It is irregular for a Board Chairman to be dealing directly with subordinates of a Chief Executive other than those mentioned above on official matters.
By such conduct, the Chairman festers parallel authority in the organisation making governance and management extremely difficult. This is exactly the situation you have created in GNPC.
It is clear to me that you are using your position as Chairman of the ruling Party to force your way through on matters which must be handled professionally. I will humbly advise that you desist from issuing out instructions to my subordinates and rather deal with me as Chief Executive on matters relating to the Corporation.
Some of your directives to my immediate subordinates pertaining to award of contracts and engagement of personnel as in the instant case, have been a source of concern to me especially to the extent that laid down procedures are circumvented.
These also go to undermine my legitimate authority as Chief Executive. Unfortunately, these subordinates are unable to advise you on the need to comply with our rules and regulations for reasons best known to themselves. What surprises me further is that you choose to give these directives mostly when I am out of the country on official business for reasons that I cannot phantom.
The results of some of your directives are challenges that I have had to grapple with in working with our auditors in their validation of the resultant transactions. I must say your conduct is putting undue stress on my
administration and affecting morale of hardworking staff of this Corporation.
I wish to emphasize that your role as Chairman of the Board does not extend to executive functions including the recruitment of employees.
You can always count on my cooperation to accede to your requests once they are in line with GNPC’s rules, procedures and acceptable practices. I am prepared to work harmoniously with you and the entire Board for the good of our Corporation and our dear country, Ghana.
Yours sincerely,
Signed by Dr. K.K Sarpong
CHIEF EXECUTIVE
cc: Chief of Staff, Office of the President, Jubilee House
Honourable Minister, Ministry of Energy
Executive Chairman, State Enterprises Commission
Members, Board of Directors, GNPC
Chief Finance Officer, GNPC
General Manager, Legal & Human Resource, GNPC
General Manager, Administration, GNPC
Internal Auditor, GNPC
Blay’s response to Dr Sarpong
Friday, 8 February 2019
DR. K.K. SARPONG
CHIEF EXECUTIVE OFFICER
GHANA NATIONAL PETROLEUM CORPORATION
PRIYATE l\lAIL BAG
TEl\lA-GHANA
Dear Dr. Sarpong,
RE: RECRUITMENT OF PROCUREMENT MANAGER AT GNPC
1. acknowledge receipt of your letter dated 5th February 2019 titled ”Recruitment of Procurement Manager at GNPC”. I find title contents unfortunate.
More particularly. I find your deliberate and misspent attempts to personalise the issue of the recruitment of the Procurement Manager and the several accusations you make against me and as the Chaiman of the GNPC Board extremely inappropriate.
2. Ordinarily. I would have preferred not to dignify the said letter with a response in respect of the matters you have raised and the allegations you made against my person and as the Chaiman of the Board of Directors of an important national corporation of which you, are Dr. KK Sarpong, arc the Chief Executive·
However, for the records of the Corporation, and considering that you chose to copy the allegations to various
personalities, it is appropriate at least in my capacity as the Chairman of the Board to correct the several misrepresentations and to set the records straight.
3. As you know very well, the Ghana National Petroleum Corporation (GNPC) is a corporate entity set up by law. The office of the Chief Executive Officer (CEO) is subject to the direction of the Board of Directors.
The day-to-day management role and business of GNPC, delegated by the Board of Directors to the Chief Executive Officer, cannot and does not cease when the CEO is temporarily absent from the country or on vacation.
Indeed, best corporate practice worldwide enjoins a good and competent CEO to have a management succession plan. Within that context, the CEO hands over to a Deputy, who continues with the day-to-day corporate manage functions in his or her absence.
In the specific case of the GNPC the law requires that “a senior officer of the Corporation shall be designated by the board”‘ to perform the functions of the CEO in his absence. Vide P.N.D.C.I, 64 (Ghana National Petroleum Corporation Act 1993) section 10 (6).
4. The Chief Finance Officer is the Senior Officer designated to act and run affairs of the corporation in your absence. As you rightly stated, but in the twisted logic of your letter, I deal with the office of CEO and not the person. In that context and based on the collective decisions of the Board, I have within the confines of my legal authority as Chairman, directed the office of the CEO, to implement decisions of the Board.
To suggest that you must be personally informed or consulted in your absence, points to a very personalised and dysfunctional management style. This should not be tolerated in a public corporation. GNPC is neither and must not be managed as a sole proprietorship entity
5. The emergency meeting you refer to with disdain was duly and rightly convened in your absence. Let me emphasise that in the light of recent and widespread discussions in the public space, we needed to ascertain that your job contract, appointment and continued tenure, sanctioned by the Board, did not violate any provisions of the 1992 Constitution of the Republic of Ghana with particular reference to its Article 199.
Thus, and even if you were at post, you would have been recused from participating in the discussion of this particular manner. However, and as CEO, you have the right and access to, and must call for the minutes of the
meeting to fully apprise you of the exact proceedings and discussions.
Rather than facts, which you can freely obtain from the minutes, you chose in your own words, to
rely on a third party account, which is obviously tendentious, and proceeded to act on that basis. This is not only unprofessional but also amounts to a major error of judgment and a dangerous modus operandi for a CEO of an institution such as GNPC. I will advise that you call for, read the minutes, get the facts and avoid the
fiction in your letter.
6. I find the rest of your allegations about interference, involvement in procurement instructions to your subordinates, festering parallel authorities et cetera, to be malicious, wicked and spurious fabrications. If these ever occurred, a must be in the figment of someone’s imaginations.
Indeed, the “undue stress” on our administration and the “low morale of hard working staff’, which you refer to in your letter, are rather direct consequences and hallmarks of your management style, which supplants tearmwork with individual ego, clanism, intimidation and victimisation of staff.
7. Without mincing my words, I find your allegation that I am using my position o f Chairman o f the ruling party to force my way ” through on matters that must be handled professionally”, to be malevolent as it is mischievous. It is deftly calculated to damage my name and reputation, impugn the independence of the Board and us
decisions. I seriously take great exception to it.
8.I find it insulting not only to me personally, but also to the Board. I was appointed by His Excellency The President to serve on the Board not as Chairman of NPP, but in my own right as citizen Freddie Blay.
As Chairman of the Board, I am hugely embarrassed by the fact that the Central Tender Board has raised issues about the Corporation’s procurement practices, to the point where the Honourable Sector Minister, found it necessary to write to Board to take immediate steps to address the anomalies.
The truth is, under your leadership and watch; our Corporation has had no Procurement Manager, for so long, in spite of several directives from the Board to your office to take the necessary steps to fill that vacancy. This dereliction of duty can simply not continue.
Playing the blame game, which you are now engaged in, will not pass. The buck stops with you Dr. K.K. Sarpong, as the CEO. Please understand and very clearly, that the recent Board directive and two-week ultimatum on this matter was conveyed to the Chief Finance Officer, also in her capacity as Acting CEO, when we held that particular emergency meeting. The ultimatum stands and it is up to you to comply or chose to ignore it.
9. I also wish to draw your attention to Sections 8 (1), 8 (2) subsection 1, and Section 11 of the GNPC Act 1983. It is absolutely wrong for you to think that you are the appointing authority and can nullify decisions and directives of the Board.
It should be clear to you that the Board and not the CEO is the appointing authority. Professionalism, which you refer to in your letter, requires that the CEO of a state-owned entity operates within and respects the law. While you must take the initiative, you are legally and professionally obliged to seek approval of the Board for all
recruitments and any restructuring.
I am aware that in the last 18 months you have employed over 200 persons in addition to the existing workforce of the corporation, mainly without the knowledge and approval of the Board. Interestingly, for reasons best known to you and in spite of the insistence of the Board, you have never bothered to fill the vacant Procurement Manager position.
10. Without any equivocation, I wish to make it clear to you that as CEO, you are not above the law and the Board of Directors. You must be guided by the prescriptions and proscriptions of the law, take due cognizance of and accept the reality and fact that you are subordinate, subject to the directives and responsible to the Board.
To operate outside the ambit of the law, usurp, arrogate, circumvent or attempt to emasculate the functions and authority of the Board, and manipulate members by all manner of actions, of the very subversive of the very Corporation you are supposed to lead. It is damaging to the corporate and public interest and to the very authority that appointed you to this high position of trust.
11. In deed and as noted earlier, it is the need to ensure that the Board acted within the law and complied with the Constitution, which triggered the emergency meetings regarding your contract and tenure. The Board has since referred the matter to the sector Minister for advice and direction and there will be a follow up by the Board,
on it.
12. To conclude, I am a totally at a loss as to the purpose and intent of this letter, which you circulated even to your subordinates and also diabolically and subtly leaked to hostile media and entities. I must state that your letter to me is riddled with innuendos, posturing and grandstanding.
In any corporate environment, this is completely unacceptable, especially from a CEO to a Board Chairman. I demand its formal withdrawal forthwith, and an unqualified apology to the Board and to me.
Yours sincerely,
Signed
F.W.A Blay, Chairman
Cc:
1. The Chief of Staff, Office of The President, Jubilee House
2. The Honourable Minister, Ministry of Energy
3. The Executive Chairman, State Enterprise Commission
4. The Board of Directors, GNPC
5. The Chief Finance Officer, GNPC
6. The General Manager, Legal & Human Resource, GNPC
JI’ The General Manager, Administration, GNPC
8. The Internal Auditor, GNPC
African Eye Report
