The troubled National Oil Corporation of Kenya (Nock) is practically bankrupt and depends on financial support from the government, bankers, and its creditors for survival.
In a report to Parliament, Auditor General Nancy Gathungu said the state corporation’s losses escalated to Sh4.03 billion in the financial year to June 2021, up from Sh3.06 billion recorded in the previous year.
During the period under review, it recorded Sh969.8 million in losses, up from the Sh494.5 million recorded in the previous financial year, making its ability tentative.
The report shows that Nock’s current liabilities of Sh8.95 billion exceeded the current assets of Sh2.65 billion, thus worsening its financial situation.
“These events or conditions, along with other matters, indicate material uncertainty regarding the corporation’s ability to continue as a going concern,” it reads.
“The corporation is, therefore, technically insolvent and its continued existence is dependent upon the financial support of the government, bankers, and its creditors, unless the management improves its performance to reduce reliance on financial support from the shareholders.”
Additionally, Gathungu has drawn attention to the firm’s award of Sh405.76 million tender for the supply of laboratory equipment.
Other dealings in question in Nock include Sh279.98 million in irregular procurement of fuel products, doubtful payment of allowances to staff, non-remittance of statutory deductions, and failure to file annual returns.
The audit shows that the tender for the supply and delivery of laboratory equipment Geochemical and Petro physical was awarded to a company at Sh405.76 million.
The audit also shows that the bidders were to demonstrate the maximum accumulated volume handled for the previous two years, by proving a gross turnover above Sh3 million as demonstrated in their audited accounts.
