The Nigerian National Petroleum Company Limited (NNPCL) has clarified the reason behind the gratuity payments made to its Chief Executive Officer, Mele Kyari, and Chief Financial Officer, Umar Ajiya, while they were still in active service.
The gratuity, which is a sum of money given to employees at the end of their employment period, has been a subject of controversy after SaharaReporters exclusively reported that Kyari, Ajiya, and other top officials of NNPC had paid themselves billions of Naira as gratuities, allegedly out of fear of being retired compulsorily by the incoming government of Bola Ahmed Tinubu, who is set to be sworn in as president on May 29, 2023.
The source had raised concerns over the payments, citing that they went against the public service rules and amounted to corruption. The source further highlighted that the recent Petroleum Industry Act (PIA) passed by the National Assembly had transitioned NNPC into a limited liability company with share capital, aimed at promoting transparency, accountability, and profitability.
However, under Kyari and Ajiya’s leadership, the reverse was claimed to be the case, with allegations that they were running NNPC like their personal company without proper oversight.
The source also pointed out that the PIA had granted the Group CEO and CFO significant powers without recourse to the President, as there is a constituted board of NNPC that lacks the authority to oversee administrative duties.
The source further highlighted that Ajiya had previously retired from another organization, NLNG, and had received gratuity before joining NNPC, and was now alleged to have paid himself another gratuity, which is against public service law, while still in active service with NNPC.
In response to the story, Garba Deen Muhammad, Chief Corporate Communications Officer of NNPCL, confirmed the payment of gratuities to Kyari, Ajiya, and others, stating that they were paid for their service to “NNPC and not NNPCL.”
It should be noted that the incorporation of NNPC as a limited liability company with share capital was carried out in September 2021, following the enactment of the PIA in July 2022, which changed NNPC from a wholly state-run entity to a commercial oil company.
The PIA was aimed at promoting long-term sustainability and value creation in the petroleum industry, with a focus on governance, administration, and the appointment of key executives.
The appointments of Kyari and Ajiya as Group CEO and CFO of NNPC Limited, respectively, were made by the President of Nigeria based on distinct terms and conditions of service, including tenure, employment benefits, and termination, as stipulated by section 59(3) of the PIA 2021.
The previous ranks of GMD or GED F&A in the defunct Corporation were not considered in their appointments, and their tenure with NNPC Limited is not regarded as a continuation of their previous positions in NNPC.
The NNPC Limited Group CEO and CFO are entitled to their terminal benefits in respect of their employment with the Corporation, as they have demonstrated patriotism by ending their career appointments to serve the nation on a five-year tenured appointment in NNPC Limited, in accordance with the provisions of the PIA 2021.