Mukesh Ambani's Reliance Industries Ltd (RIL) has
finally agreed to a scrutiny of its expenses in the flagging KG-D6 gas block by the official auditor, Comptroller and Auditor General (CAG) of India, even after expiry of the contractual period.
However, the company has said that contractually there is no scope for a performance audit and the scrutiny should be strictly a financial audit as has been promised by the oil ministry.
CAG had strongly contested the condition and the
ministry too had been pressing RIL to give the auditor unfettered access to account books. RIL in a November 16 letter referred to meetings held with the ministry to state that the company has been emphasising that an audit report should be kept confidential as required by the production sharing contract (PSC).
CAG, it had said, can conduct audit/ special performance audit of the ministry or the Directorate General of Hydrocarbons (DGH) after the audit process under the PSC is complete.
RIL president and chief operating officer bBusiness) B. Ganguly on July 16 wrote to the ministry saying the company was agreeable for audit of KG-D6 as per relevant sections of the Accounting Procedure to the PSC. The PSC provides for audit within two years of the period being scrutinised and only under exceptional circumstances can it be done even after lapse of the mandated period.
"As agreed by the ministry of petroleum and natural gas, it will be a financial audit and conducted in compliance with various subsections of and it will not be a performance audit," Ganguly had added. The company agreed to cooperate in the audit even if the exercise is conducted after a lapse of two years.
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