RIL, CAG in new tug-of-war on audit of KG gas fields | business | Hindustan Times
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RIL, CAG in new tug-of-war on audit of KG gas fields

The audit of RIL’s prolific gas producing block by the CAG has hit a major snag with fresh disagreements cropping up between the two sides over the scope of the audit. Anupama Airy reports.

business Updated: Jan 30, 2013 22:39 IST
Anupama Airy

The audit of Mukesh Ambani-led Reliance Industries Ltd’s (RIL’s) prolific gas producing block — the KG-D6 block on the eastern offshore — by the Comptroller and Auditor General (CAG) has hit a major snag with fresh disagreements cropping up between the two sides over the scope of the audit.

RIL has shot off a letter to the government, a copy of which is available with HT, stating that the scope of the audit is different with the assurances given by the government to the company. The auditor was also making “a number of assertions that are contradictory to assurances given to the company by the petroleum ministry,” the letter said.

Referring to recent communications from the petroleum ministry, RIL said assurances by the ministry “confirmed to us (RIL) that the proposed audit by the CAG would follow the audit process set out in Section 1.9 of the accounting procedure of the Production sharing contract (PSC) and that this would not be a performance audit of the contractor.”

However, RIL told the ministry that when it “sought the same confirmation from the CAG audit team during its kick-off meeting on January 9, 2012, the CAG made a number of assertions that are contradictory to the assurances given by the petroleum ministry.”

RIL said in its January 18 letter that while “CAG goes on to refer to the scope, extent and manner of the audit being as laid down under the CAG (DPC) Act which, neither we are aware of nor bound to follow.”

“We believe that these are two different audits, with different scopes and auditees,” RIL said.