Reliance says CAG not giving enough time to respond

Ahead of a planned meeting with the CAG, Reliance Industries has said that it was not being given enough time to respond to the audit observations on KG-D6 gas fields.

In a letter to the petroleum ministry, RIL Senior Vice President (Commercial) B Ganguly stated that the time CAG has allocated to the company at the July 12 Exit Conference that will conclude the audit of RIL's KG-D6 field cost, was "far too inadequate" to answer issues raised in the audit.

"An audit of accounts cannot transform itself into a review of performance of the operator. (CAG) must concern itself with the integrity of the accounts and their adherence to the decisions of the Management Committee (that oversees field operations). It cannot supplant the Management Committee," he wrote on July 1.

Previously, the company's Executive Director P M S Prasad had written to Oil Secretary that CAG neither discussed finding mentioned in the draft report with RIL, nor did it raise them at the June 4 brief interaction the auditor had with the company.

The CAG on June 7 submitted its draft report to the oil ministry indicting RIL of receiving undue favours.
    
RIL said it received extracts of the CAG audit on June 23 and was asked to respond by June 30.
    
"Since we are required to re-examine our substantial records and correspondence to respond to issues which seem to have been inadequately appreciated in view of their complex legal and contractual implications, adequate time may be given to us to respond," it said.
    
"We would humbly submit that a Performance Audit is beyond the scope of government powers of audit" under the PSC, Ganguly said.
    
Ganguly pointed to the April 15, 2009, letter by the Principal Director, CAG, to RIL stating that a "special audit (not performance audit) was to be conducted" on its block.
    
The PSC "entitles the government to audit records and documents supporting costs," but "does not mandate a second guess of the prudence of the decisions of the operator and management committee," he wrote.