CBI set to file FIRs against RIL, DGH in D6 cost inflation case

Troubles seem to be mounting for Reliance Industries Ltd over its Krishna-Godavari D6 gas block, where production continues to be on a downslide. The Central Bureau of Investigation is reportedly all set to file a case against the Mukesh Ambani-led RIL over inflation of costs.

Meanwhile the company is likely to take a tax hit of about Rs200 crore, as the union finance ministry has ruled that it is not exempt from paying state-level taxes on its gas sales.

According to a Times of India report today, the CBI has almost finished investigations against RIL and the former director-general of hydrocarbons (DGH), V K Sibal, and first information reports – a preliminary for prosecution – are likely to be registered soon.

It quoted a senior CBI official as saying, "We have found complicity of Sibal with RIL." Officials said Sibal and some Reliance officials would be formally questioned now.

The case was taken up after the Comptroller & Auditor General of India (CAG) tabled a report criticising RIL, saying costs were allowed to be escalated to the detriment of the exchequer; and that RIL was allowed to violate terms of its production sharing contract.

The allegations against Sibal is that he favoured RIL in approving an increase in capital expenditure from $2.4 billion to $8.8 billion for KG D6 field between September and December 2006 for which he got personal favours from RIL. "We have almost finished the enquiries. The final go-ahead would be given by top brass after which regular case would be registered," the paper quoted its source as saying.