SINGAPORE — A Shell Eastern Petroleum employee admitted on Tuesday (15 December) to abetting the misappropriation of nearly $50 million of gasoil from the company’s largest refinery in Singapore, the first from the company to be convicted in the heist.
Sadagopan Premnath, a 40-year-old Indian national, was involved in the misappropriation from 2017 to 2018.
Premnath had come to Singapore to work on 2003 and joined Shell Eastern Petroleum in 2012. He worked as a fieldman, or panel operator, and was tasked to manually open or close heavy-duty valves and control black oil control panels.
He was working on Shell’s Pulau Bukom site, which is its largest petrochemical production and export centre in the region.
The embezzlement scheme was hatched by a shore loading officer from Shell, Juandi Pungot, and his colleague Abdul Latif Ibrahim in 2007. Another shore loading officer, Muzaffar Ali Khan, was recruited in the same year.
Other co-conspirators were recruited between that year and 2017. The group misappropriated gas oil in two phases, between 2007 and 2013, and between 2014 and 2018.
Premnath had been recruited into the syndicate in mid-2017 by Juandi. He agreed to join the illicit group as he was worried that his senior colleagues, including Juandi, would otherwise treat him with hostility.
The group was led by Juandi, Muzaffar and another shore loading officer Koh Choon Wei, who would approach Vietnamese and Greek captains to initiate the illegal loadings.
Juandi also met surveyors who offered to perform illegal loadings and source for foreign vessels to purchase the misappropriated gasoil.
One surveyor suggested performing illegal loadings for vessels belonging to Prime Shipping Corporation. Subsequently, the group began corruptly bribing independent surveyors who had been appointed by Shell to conduct inspections on the quality and quantity of gasoil sold to vessels. These surveyors would not report the misappropriation of excess gasoil onboard vessels.
From 2016, the syndicate members supplied to multiple Prime Shipping vessels with misappropriated gasoil on numerous occasions. They also continued to sell misappropriated gasoil to both bunker vessels and oil tankers from other companies including Sentek Marine & Trading and Sirius Marine.
Juandi would distribute the criminal proceeds to all involved even if the individuals were not present or on duty during the illegal loading in order to prevent unhappiness among them. His intention was to show to the syndicate members that they worked as a team.
The syndicate members would employ different methods to evade detection, including configuring the flow of misappropriated gasoil through carefully planned routes on the piping system, and ensuring that multiple pumps and tanks were moving at the same time.
They made use of their knowledge of Shell’s internal systems, including having a group stationed at the oil control panel to mask the movement of misappropriated gasoil through manipulation, and tamper with the bunk meter, which would disrupt gasoil readings. As part of their measures, one co-conspirator would deliberately distract their supervisor and make excuses regarding the delays caused by illegal loadings. One of them would also tamper with the CCTV cameras to ensure illegal activities were not captured.
Even though employees were not permitted to use their mobile phones while on duty, the syndicate members would coordinate their activities using their phones.
Premnath’s primary role was to open or close the necessary valves using the black oil panel, as directed by other syndicate members. He would also move over and let the more experienced members do the illicit work when told to.
He did not know the identities of those who bought the embezzled gasoil.
In total, Premnath abetted the commission of criminal breach of trust of misappropriated gasoil between 2017 and 2018, valued at about US$36,087,243 (S$49,122,513). He pleaded guilty to four charges of abetting the conspirators to commit criminal breach of trust related to four occasions during this period. Five other charges will be taken into consideration when he is sentenced.
He received US$150,000 in criminal proceeds and has not restituted the sum to Shell.
In early 2015, Shell began observing a significant unidentified oil loss at Shell Pulau Bukom, prompting the company to engage experts to investigate. A representative of Shell lodged a police report at the Police Coast Guard Brani Base on 1 August 2017, informing that the company had suffered unidentified loss of fuel amounting to about $2.98 million in April 2017.
Due to the misappropriation, Shell took measures to improve its systems and processes, including installing new and additional CCTVs, developing a software to detect potential theft of gasoil, and creating a new permanent position to strengthen the supervision of key processes.
The estimated cost of these measures and the management of the long-term misappropriation will be around $6,000,000, according to court documents.
Premnath will be sentenced on 18 February next year.
For abetting to commit criminal breach of trust as a clerk or servant, he may be jailed up to 15 years, and fined.
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