Reliance Industries, pulled up by the CAG for alleged contract violations of a gas block, on Friday told a Parliamentary panel that it was not given a "fair" opportunity to be heard and the observations by the government auditor were on technical issues and not accounting.
Top company officials, who deposed before Public Accounts Committee (PAC), also claimed that the draft report submitted by the Audit in June 2011 "purported" to be a performance audit which as "not provided for" in the production-sharing contract (PSC).
The Mukesh Ambani-led company said under the PSC, the government is entitled to direct and audit the contractor's books and record in accordance with provisions of the accounting procedure.
In a presentation made before the Committee headed by BJP leader Murli Manohar Joshi, RIL said performance audit is best carried out by technical experts with knowledge of deep water operations.
The company alleged that the audit was carried out by CAG teams which went for a field audit without seeking or examining the relevant records.
RIL officials, which included group president V Balasubramanian and executive director PMS Prasad, said their request to interact with technical experts relied upon by the CAG in preparation of the report was also rejected by the auditor.
CAG representatives were also present during the presentation before the PAC as per practice.
Sources said the company has invited members of the PAC to for an "on-the-spot" study of the KG-D6 block. "We may ask them fresh questions after visiting the site," a PAC member said.
On the issue of retention of contract area, RIL told the panel that the determination of a discovery area is a technical matter left under the PSC to the technical judgement of the operator.
It said all data and information "fully justified" contractor position on retention of entire area as discovery area and was approved by the management committee (MC) and the government on that basis.
The CAG report had faulted the oil ministry and its technical arm, the Directorate General of Hydrocarbons (DGH), for allowing Reliance to retain the entire 7,645 sq km KG-DWN-98/3 (KG-D6) block in the Bay of Bengal after the giant Dhirubhai-1 and 3 gas finds were made in 2001.
RIL claimed that CAG has not given any technical basis to justify its observation.
The PAC has sought more documents from Reliance on cost escalation after CAG said, "Most procurement activities were undertaken late in the line with the schedules of the Initial Development Plan of May 2004. By contrast, activities in respect of items in the Addendum to the IDP (AIDP) were initiated even before the submission/approval of the AIDP. Clearly, the development activities of the operator were guided by AIDP, rather than IDP."