Africa Oil & Gas: Angola pays KPMG €15Mi to check Isabel dos Santos accounts at Sonangol

Sonangol buildings
Isabel dos Santos was appointed to chair Sonangol by father then Jose Eduardo dos Santos

Angolan oil company Sonangol will spend 15.4 million euros on the audit of the group’s accounts, which will be guaranteed by KPMG, after it deferred the consultant chosen by the previous administration, Isabel dos Santos, whose accounts will also be analyzed.

According to an order signed by the President of the Republic, João Lourenço, dated 6th February and to which Lusa has had access today, the business authorized in the document is justified “by force” from the identification of a “superveniente interest, “which forced Sonangol to” cancel the award of the contract for the provision of audit services to the auditor who was originally scheduled to be hired. ”

The same order states that there is an “urgent need” to hire a new auditor for the group, thus authorizing the adoption of a simplified procurement procedure “by material criteria”, specifically targeting the audit services of the individual and consolidated financial statements, Sonangol and subsidiaries, for the fiscal years 2017, 2018 and 2019.

“As well as to carry out a financial diagnosis of the company’s accounts, referring to the period from January 1 to December 31, 2017,” reads in the document, which authorizes the contracting of KPGM by the Sonangol administration for 19, 1 million dollars (15.4 million euros).

Isabel dos Santos was chairman of the Sonangol board of directors between June 2016 and November 2017 until she was exonerated by the new President of the Republic, João Lourenço, who placed Carlos Saturnino at the helm of the oil company.

Sonangol clarified in December that it had declined to sign the contract with consultancy PwC for the external audit of the Angolan state oil company, which had been announced on November 1 by Isabel do Santos, claiming “conflict of interest.”

Sonangol said at the time that the company “had already been hired as a consultant to the transformation process” in 2016, so “the award of the same to PwC, formed a framework of conflict of interest.”

The oil company insisted that the contracting of PwC to provide auditing services to the individual and consolidated financial statements of Sonangol EP and its subsidiaries, to be in force until 2019, announced by the management of Isabel dos Santos on November 1, was not directed by the chief of State, João Lourenço, in charge since September 26.

“Encouraging the national oil company also complied with the Basic Law of the Public Business Sector, which determines that the profile of the auditor for Sonangol has to be defined by the holder of the executive power,” he added.

The management of Sonangol also stated that “the circumstances surrounding the contract were analyzed”, it was concluded that “there has been a substantial change in the circumstances that led to the tendering process for the acquisition of the audit services and the consequent award of the contract.”

On November 1, the administration of Isabel dos Santos stated that the selection process “safeguarded compliance with all legal procedures” and included “additional steps of direct interaction between the parties, in order to enhance transparency, equity and application of ethical principles “governing the business of the company.

PwC had already audited the accounts of Sonangol in 2016, validating them, but “with reservations”, namely in the nature and circumstance of the “transactions of various natures” that the oil company maintains with the Angolan State, on the recoverability of investments made previously and also by the change in the accounting policy of the group.

Sonangol’s consolidated net income in 2016 was € 13,282 million (€ 70.5 million), a decrease of 72% over the year 2015, “as a result of a decrease in financial results and results of subsidiaries and associated companies “says the oil company in its report and accounts.

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