PEPL Case Diary / Entry 01.

Actual names have not been featured in this document, to protect the identity of the client and the key people involved in this exercise. But it is sufficient to say that the client’s operations are aligned to the building and construction industry in the country.

Concern area reported by client

Loss of thousands of litres from their diesel reserves for the use of genset and other applications. Reports on the shortage became a serious issue, when discrepancies were reported on a regular basis – initially leading to suspicions of pilferage from the inside, for these unaccounted losses.

Initial evaluation done by client

Initial reports of a shortage were based on detailed usage reports analyzed by individual departments, and overseen by senior members of accounting and admin departments. The evaluation teams found it difficult to reconcile status figures when it came to verifying three key areas – supply, consumption and balance stock levels. (The teams did take into account a 5% allowance in terms of invisible losses due to evaporation, etc.)

Initial evaluation done by Private Eye

Our teams wanted to start from scratch. So a detailed study of consumption patterns and offtake by each department was done, leading us to one aspect that was probably overlooked by internal teams. Based on our study and analysis we found that the shortage (in volume litres) almost identical every month – with a minor variations. The regular pattern was strange and baffling – totally like a puzzle that dared you to solve it.

It also meant that someone was systematically taking out diesel, every week /month.  Taking out diesel was not easy, because unlike metal parts, diesel was a liquid and needed a container to be taken out. Furthermore a large container was necessary to do this, looking at the steady volumes missing month after month.

Detailed evaluation done by Private Eye

Looking at the task, end to end, we also looked at the possibility of cars and other larger vehicles being used to take the diesel out. Eventually, this was ruled out because the vehicle exit systems were rigorous – these areas were heavily guarded.

The first major breakthrough came when we did a review of the entire delivery to consumption cycle. We had visually charted the route, step-by-step, from the point of entry to the points of storage and offtake, and followed that up with detailed conversations with individual departments.

Finding the last piece to the puzzle

At the closing stages of our efforts, the one single grey area that emerged was at the point of vehicle entry, and the first two steps of diesel being tapped out from the tanker to the large storage tanks.

And here’s what we did. We looked at upcoming shipments and set a marker on the date of the next delivery scheduled. And when the diesel tanker drove in we let it through to complete delivery formalities – this seemed to be one specific area to look for indicators and gaps.

After the delivery process was completed, the tanker was stopped on its way out and taken to a cordoned off area, where a special team from our task force thoroughly examined the tanker – inside/out.

The inspection process revealed the last piece of the puzzle – we found an inner tank with a  built-in secret recess that held back 1,500 litres. So on the face of it the required volume was coming in – the tanker was full. And when the tanker was being emptied, there was still some diesel left in its secret chamber.

1500 litres a week was six thousand litres a month – which was roughly the extent of loss reported by internal teams. At the end of the day, it wasn’t pilferage by employees within the company but a clear intent to defraud by the suppliers of diesel.

That was good work done and our job ended at this point – after which other competent authorities in the company took over, follow up action and closure.