ONGC chief Raha denied extension
The company's senior most director RS Sharma is being asked to officiate as the acting chairman of the company.india Updated: May 25, 2006 13:57 IST
In an unprecedented move, the Government is understood to have declined an extension to Subir Raha, the high profile chairman of Oil and Natural Gas Corp, at the end of his five year tenure as the head of India's most valuable company.
ONGC's senior most director RS Sharma is being asked to officiate as the acting chief of the company, oil ministry sources said.
Raha's five year term came to an end on Wednesday after the Petroleum Ministry opposed to extend his tenure. The Ministry's decision was believed to have been endorsed by the Prime Minister's Office later.
Raha is probably the only head of a public sector firm to be denied an extension till his superannuation. Till date all PSU heads who had not reached the age of 60 years even after completion of their tenure, were given an extension till their retirement age.
According to sources, the ground of Raha's exit was laid by former oil minister Mani Shankar Aiyar, who severely criticised the ONGC chairman for "insubordination" and converting the company into a "one-man-show".
Former Petroleum Secretary SC Tripathi had also admonished him for "doing nothing" for the energy security of the country.
Raha was last year involved in a public spat with Aiyar over the minister's "interference" in ONGC's internal affairs. His woes were compounded with TNR Rao's adverse report on the fire that devastated an oil installation on the Mumbai High field last year.
Petroleum Ministry set aside 'very good' ratings given by previous oil secretaries including present Cabinet Secretary BK Chaturvedi, sources said.
The Ministry also overturned the present Oil Secretary MS Srinivasan's recommendation for an immediate three-month extension followed by a Public Enterprise Selection Board (PESB) approval till August 2008, they added.
Interestingly, Cabinet Secretary is believed to have not endorsed Petroleum Ministry's reasons for denying Raha an extension as charges levied against him were "unverified". The Rao committee report had blamed the ONGC management for the July 27, 2005 fire at the Mumbai High and went to the extent of questioning the safety certificate issued by international agencies like BVQI saying the management had colluded with the agency.
Rao report ran contrary to a clean-chit given by world's fourth largest oil firm Royal Dutch/Shell, whose experts had assisted ONGC in probing the reasons for the fire. Aiyar too had highly praised the ONGC and its management in Parliament for disaster management in the aftermath of the fire.
While Petroleum Minister Murli Deora declined comments despite several attempts, a senior oil ministry official said, "Raha is not being given a boot. He was appointed for five years or till 60 years of age, whichever was earlier. His five year term ended yesterday. We are not sacking him or terminating his service. In the normal course, the contract has ended."
Raha had won many admirers in the industry for his visionary approach and big-bang ideas but also rubbed many on the wrong side in his crusade to cleanse the ONGC.
After removing loopholes in its contract system, he transformed ONGC from an apathetic and inefficient monolith to an entity capable of withstanding the competitiveness unleashed by a deregulated environment.
During his tenure, ONGC's gross sales went up from Rs 22,841 crore in 2001-02 to Rs 50,900 crore in 2005-06, while net profit spiralled up to Rs 14,175 crore from Rs 6,197 crore during the same period.
He is also credited with acquiring MRPL and transforming ONGC subsidiary ONGC Videsh Ltd, which at one time was about to be shut down, into the largest Indian trans-national company with committed investments of $4.19 billion in 21 properties across 12 countries.
Sources said Raha emerged victorious in the public spat with former petroleum minister Mani Shankar Aiyar where he offered to resign if the minister persisted in appointing more government nominees on the company's board. But the controversy left him a trifle vanquished as well.
Raha's biggest strength remained his forthrightness and his deep integrity and insight.