Police arrest seven suspected in oil ministry scam

NEW DELHI (Reuters) - Police have arrested seven people on suspicion of running a scam to steal documents from India's oil ministry to sell to energy consultants and private companies.

A court in New Delhi on Friday ruled that four men - two former ministry employees, a former journalist and an industry consultant - would be interrogated in police custody over the next four days. The three other men will be held for two weeks.

Police told the court they had recovered stolen ministry documents from some of the accused and all were involved in supplying them to corporate clients.

India's teeming ministries - which typically conduct business from handheld files and binders tied with string instead of computers - have faced accusations that documents have been copied and leaked ahead of major sales or tenders, or policies affecting companies.

Prime Minister Narendra Modi's administration installed closed-circuit cameras late last year to stop people sneaking out of the oil ministry with documents. The arrests were the first since the cameras were installed.

Police said late on Thursday that they received information that people were trespassing in ministry offices at night, using false identity cards, temporary passes and duplicate keys for offices.

"Investigations further revealed that the stolen documents were being sold to some individual of private energy consultancy companies," as well as in the petrochemical or energy industry, police said in a statement.

An official at Reliance Industries, one of India's largest conglomerates, said it had learned one of its officials had been detained in connection with the case. The official said the company was unaware of any other details and it was conducting an investigation.

"We are determined to cooperate in every possible manner," the Reliance official said.

Shares in Reliance closed down 3.2 percent, the biggest loser in the NSE bluechip index.

Reliance Industries is in international arbitration proceedings with the petroleum ministry over issues including implementation of higher gas prices and cost recoveries.

In India, corporate lobbying is illegal so companies gather information on government policy themselves.

A former oil ministry official told Reuters that a lack of clarity on parameters for major decisions, along with long and opaque processes exacerbated the problem.

"These companies try in their own way to do advocacy - and sometimes go beyond," he said.

(Reporting by Rajesh Kumar Singh, Andrew MacAskill and Clara Ferreira Marques; Additional reporting by Aman Shah in Mumbai; Editing by Robert Birsel)