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CBI probe sought in GSPC-Geo Global's KG Basin deal

Gujarat HC issues notices to GSPC, state, central govt on PIL

BS Reporter  |  Ahmedabad 

The High Court on Thursday issued notices to state government and State Corporation (GSPC) Limited while hearing a public interest litigation (PIL) seeking investigation into the PSU's joint venture with Canada-based Resources Inc (GGR) for oil and gas exploration in

The filed by one Nimishkumar Shah has alleged it its petition that the 'misadventure' of the with GGR has resulted in Rs 10,000 crore loss to public exchequer. Which include undue benefit to Adani Energy and other companies, he further claimed.

A division bench of Chief Justice Bhaskar Bhattacharya and Justice J B Pardiwala while issuing notices to government and has also issued notice to Central government and directed all parties to file their respective replies to the allegation made in the with in two weeks. Further hearing in the case has been kept in June after the High Court's summer vacation.

holds 80 per cent interests in Deendayal Block while Jubilant Enpro and GeoGlobal Resources hold 10 per cent each. The consortium partners committed $59.23 million for the first exploration phase and $32.12 million and $18.35 million for the subsequent phases amounting to a total of $109.7 million.

The differences between GSPC and GeoGlobal cropped up in September 2005 when the state venture asked the Canadian partner to contribute towards exploration costs on account of 'significant cost overruns'. Subsequently, GSPC severed its efforts while it continued to pursue exploration interests in DeenDayal Block, seeking $150 million from GeoGlobal.

GSPC blamed the technical partner GeoGlobal for the incorrect advisory, asking the JV partner in to surrender its 10% stake.

The DeenDayal Block of has certified reserves of 2 TCF of gas. The partners have been at loggerheads since 2005 over the commercial terms and payments of over $150 million. There has been no amicable resolution to the dispute.

The filed in Gujarat High Court on Thursday cited the case of the alleged which came to light in March last year.

It said that just like investigation of the said was handed over to Central Bureau of Investigation (CBI) and FIR came to be lodged against the beneficiaries and the decision making authorities, in the case of GSPC also the probe should be handed over to the central agency.

It also sought penal actions against the beneficiaries and the decision making authorities related with the GSPC case since serious issue regarding loss of public exchequer to tune of Rs . 10,000 crores is involved in the matter.

PIL has cited the Comptroller and Auditor General of India (CAG) report for action against GSPC and said that though exploration, development and production activities are of high risk and capital intensive nature and requires long gestation period, the Company largely utilised (2006-11) short term loans (constituting 38 per cent of the total borrowings) on these activities.

"It is pertinent to note that the dependence on short term loans for these activities was not a prudent financial practice," the petition added.

First Published: Thu, April 25 2013. 20:16 IST