Controversy over Sasan ultra mega power project
Globeleq Singapore Pte Ltd has accusied Ernst and Young of not being entirely honest in its deposition to the Power Finance Corporation (PFC).delhi Updated: Apr 26, 2007 21:56 IST
The controversy over the award of the Sasan ultra mega power project has taken a new turn with Globeleq Singapore Pte Ltd, the company at the centre of the storm, accusing Ernst and Young of not being entirely honest in its deposition to the Power Finance Corporation (PFC).
Globeleq Singapore made the charge in a letter to Power Minister Sushil Kumar Shinde last week.
The 4000 megawatt project was initially awarded to a consortium of Lanco Infratech and Globeleq Singapore. But in February this year Globaleq Singapore was bought over by Lanco and Jindal Steel and Power. The second lowest bidder, Reliance Energy, then objected strongly to the award, claiming Lanco and Globaleq Singapore had concealed this crucial impending development while bidding. Ernst and Young, who were advisors in the deal, claimed they too had no idea of the buyout.
The letter has pointed that Ernst & Young are the auditors for Ernst Globeleq Singapore Ltd and also for Globeleq Ltd, its former parent company. It notes that Globaleq Singapore's annual accounts - which had been submitted to qualify for bidding - had clearly indicated its assets: the Sidi Kirr plant in Egypt, Songas in Tanzania, Cobee in Bolivia, Haripur and Meghnagat in Bangladesh.
"Significantly three out of the five assets are 100 per cent owned by Globeleq Ltd. This is clearly stated in the annual accounts of Globeleq Ltd. This leaves no chance for misrepresentation or ambiguity and clearly demonstrates that Globeleq Singapore Pte Ltd had taken the technical and financial capabilities of Globeleq Ltd," states the letter.
"Ernst& Young is being driven towards defending itself rather than looking at the whole process in a logical manner," the letter adds.
Ernst & Young's spokesperson refused to comment.
However, a senior power ministry official pointed that when Globeleq Singapore submitted the Request for Qualification (RFQ) it was still owned by Globeleq Plc. The recent letter has been sent when Globeleq Singapore is owned by Lanco and Jindal. "What would have been relevant to help resolve the issue is a letter from Globeleq Plc, since they are aware of the details," he stated.
An email communication between Globeleq Plc and Ernst Young available with Hindustan Times has Ernst and Young agreeing that when Globeleq Singapore submitted the RFQ applications, it was still a subsidiary of Globeleq Plc. The Board of directors who submitted the request for proposal (RFP) bids were nominated by Globeleq Plc.
It also admits that while assessing the veracity of figures furnished, the consulting firm had acknowledged the official press release on the Globeleq Plc website (relating to the sale of Globeleq Singapore)which clearly notes that Globeleq Plc was involved in the Sasan Project.