CBI books former oil regulator Sibal

RIL shares fall 4 per cent on probe fears.

The Central Bureau of Investigation (CBI) on Friday registered a case against former Director General of Hydrocarbons (DGH) V K Sibal for allegedly favouring a private company in exchange for personal gains.

CBI conducted searches at Sibal’s official and residential premises in Noida, Delhi, Mumbai and Dehradun.

CBI alleged that in 2005, the company was awarded a contract for conducting a seismic survey on a nomination basis at an exorbitant cost, causing a huge financial loss to the government.

Sibal, who was DGH between 2004 and 2009, could not be contacted as his mobile phone was switched off.

CBI gathered incriminating evidence against Sibal, including documents related to immovable and movable properties, during the raid. The search is still going on.

In a statement, CBI said a case against certain DGH officials and some others had been registered under Section 120-B IPC read with 420 IPC and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988.

CBI has booked Sujata Subramaniam, manager, exploration, GX Technology, along with six people who used to work in DGH. They include D K Rawat, chief geologist; TSLN Reddy, manager, finance and accounts; S K Jain, advisor, geophysics; K A Murli, head of department, accounts; Amrit Sahi, advisor, contract; and Savinder Gupta, chief chemist.

The Central Vigilance Commission had earlier alleged discrepancies in works carried out by Sibal and recommended a CBI probe.

RIL SHARES SLUMP
Reliance Industries’ (RIL’s) shares fell nearly 4 per cent on fears the company might face regulatory action. A Comptroller and Auditor General (CAG) draft report has accused Sibal of favouring RIL and some foreign consultants.

RIL shares fell Rs 35, or 3.95 per cent, to Rs 862.15, on the Bombay Stock Exchange (BSE). RIL, which has the highest weight in the Sensex, dragged down the index by 79 points. Sensex fell 83.07 points, or 0.44 per cent, and closed at 18,762.

“There is delivery-based selling by large investors in the Reliance counter. The market fears harsh regulatory move against Reliance after CBI has started inquiries in several matters,” said independent equity advisor S P Tulsian, who tracks RIL closely.

RIL has been under selling pressure from foreign institutional investors since CAG sent its report to the oil ministry for comments last month. On June 20, RIL shares were at their lowest level in two years at Rs 829 on BSE.

The CAG report said RIL inflated the project cost for the D6 block in the KG basin. CAG said the oil ministry and DGH “irregularly allowed the operator (Reliance) to enter successive exploration phases without the stipulated relinquishment of area and then allowed the operator to declare the entire contract area as a ‘discovery area’, thus avoiding any relinquishment whatsoever”.

In May 2004, RIL had proposed an investment of $2.4 billion to produce 40 million standard cubic metres per day (mscmd) gas from D1 and D3 fields and later, in October, 2006, moved an addendum to this saying $5.2 billion would be required in Phase-1 to produce 80 mscmd gas and another $3.3 billion to sustain the peak output for a longer duration. CAG, however, did not say that RIL overbilled the government or caused a loss to the exchequer. Sibal was the chief of DGH, the upstream regulator, when these costs were approved.