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RIL agrees for CAG audit of its finances

NEW DELHI, Nov 25, 2012, DHNS :

RIL agrees for CAG audit of its finances

The Reliance Industries (RIL) has finally agreed to an audit by the Comptroller and Auditor General of India of its finances incurred in the KG-D6 gas block even after expiry of the contractual period, but has said no to performance audit.

“As agreed by the Ministry of Petroleum and Natural Gas, it will be a financial audit and conducted in compliance with various sub-sections of Section 1.9 and it will not be a performance audit,” according to RIL President and COO (Business) B Ganguly wrote to Petroleum Ministry earlier.

Ganguly said, RIL agreed to the CAG doing its audit of expenses during 2008-09 ro 2011-12 as an exception. Auditing of Reliance’s KG-D6 block has been in the news since CAG said in a report in September last year that the Oil Ministry had been lax in enforcing contracts with oil explorers such as RIL, Cairn India and BG India.

Subsequently, Reliance said it did not dispute a CAG audit but the contract with the government provided for only a financial audit, not a performance audit. The company also cited the contract that allowed a second audit only within two years after the closing of any financial year.

RIL argued that it had adopted internationally accepted practices of the oil and gas industry. It had told the ministry that in a financial audit, as per its contract, the company was required to submit the field’s accounts to the ministry, not CAG, and the audit report should not be placed in Parliament.

Also, the firm wanted CAG to maintain confidentiality of the information shared and not make them public. The CAG had strongly contested the conditions and the Petroleum Ministry too had been pressing RIL to give CAG “unfettered access to account books”.

However, according to Ganguly, the performance audit of the Petroleum Ministry/the Directorate General of Hydrocarbon would not be mixed with the audit of RIL’s accounting books and records which will be an independent standalone audit.

 

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