The Comptroller and Auditor General (CAG) audit of KG-DWN-98/3, popularly known as KG D6, has once again hit a roadblock with Mukesh Ambani owned Reliance Industries Limited (RIL) refusing to accept the “exceptional circumstances’’ argument advanced by the Petroleum and Natural Gas Ministry for the audit and seeking an assurance that the audit will be kept completely “confidential’’ and not impact its (RILs) economic interest.
It has also sought an assurance that the Contractor (EIL) would not be subjected to any adverse implications to its “economic interest’’ as a result of the performance audit of Petroleum Ministry/DGH.
The assertion by RIL, laying down pre-conditions for the audit once again, have already been rejected by CAG which has asserted that no audit would be possible with pre-conditions and it has an unfettered right to carry out such an audit. The CAG has already asked the Petroleum Ministry to withhold all approvals to the Mukesh Ambani-owned company, except in emergency situations.
The CAG, in its communication, has pointed out that every effort was being made to thwart the audit by the constitutional body, and one after another obstacle was created in the conduct of a smooth audit till 2011-12. RIL was shying away from providing information and have adopted an ‘indifferent’ attitude to the CAG, resulting in the audit coming to a standstill,’’ the CAG has conveyed to the Petroleum Ministry.
CAG had last month strongly objected to the “restrictive conditions” laid down by RIL for an audit, which it said “impinge upon the basic mandate, rights and obligations of the CAG” to conduct an audit and report the results to Parliament.
In a letter to Petroleum Secretary G.C. Chaturvedi on October 26, two days before Mr. Reddy was shunted out, the CAG said the conditions were unacceptable, and the CAG’s (Duties, Powers and Conditions of Service) Act, 1971, gave it an unfettered right and would override all conditions sought to be imposed on the audit process.
In it, the government auditor listed the conditions laid down by RIL: audit be restricted to “accounting books and records;” audit of the years that were time-barred be subject to the consent of the operator; audit report be submitted to the Ministry and not Parliament; audit be subjected to confidentiality arrangements between parties to the production-sharing contract; and the CAG be bound not to use the information acquired during the audit for any other audit under the Act.
In a latest communication to the Petroleum Ministry, RIL president and COO (Business), B. Ganguly RIL had represented that the audit report of the audit conducted under Section 1.9 of PSC shall be submitted to Petroleum Ministry. “The procedure regarding the exceptions and adjustments shall be followed as laid down in the SPC and in case of any disagreement; it shall be resolved by the mechanism provided in the PSC. RIL also emphasised that the report shall be kept “confidential’’ as required by the PSC,’’ the November 16 letter states.
Further, Mr. Ganguly said the CAG may conduct audit/special performance audit of the Petroleum Ministry and Directorate General of Hydrocarbons (DGH) after the audit process under the PSC is completed. ``RIL has assured that it would extend cooperation by providing the Ministry/DGH with documents required to be maintained under PSC to facilitate such performance audit by the CAG of the petroleum Ministry/DGH,’’ it stated.
However, as agreed, the letter states such a performance audit of Petroleum Ministry/DGH would not be mixed with the audit of the Contractor’s (RILs) accounting books and records under Section 1.9, which will be an independent stand alone audit and the contractor would not be subjected to any adverse implications to its economic interest as a result of the performance audit of the Petroleum Ministry/DGH.
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