CAG has got it all wrong on KG D-6, says RIL
11 Jul 2011
Ahead of a planned meeting with the Comptroller & Auditor General of India this week, it appears that Mukesh Ambani-controlled Reliance Industries Ltd could have sent a voluminous reply on the audit to the oil ministry and the directorate general of hydrocarbons (DGH).
The reply cities 'misrepresentation of reading on KG D6', according to a CNBC-TV18 report citing unnamed sources.
It says sources hint that on Thursday, RIL wrote a reply stating that the allegation of gold-plating costs at the Krishna-Godavari D-6 gas block, which it operates are baseless and the handiwork of corporate rivals – apparently pointing a finger at brother and rival Anil Ambani's ADAG.
The reply says that the draft CAG report has nothing to suggest gold plating.
RIL is believed to have said that CAG has actually confused authenticity of expenses with the desirability of incurring those expenses, adding the two things are totally different.
It holds that CAG should only be looking at the authenticity of the expenses, saying the auditor is confused in believing that incurring a higher cost actually benefits RIL, when it actually reverses the case - if RIL incurs a lower capex the profit will be higher.
