Ahead of new Oil Secretary Vivek Rae taking over as Chairman of Petronet LNG Ltd, a member of the Parliamentary Standing Committee on Petroleum & Natural Gas has questioned the rule under which the top government functionary is appointed head of a private company.
Mukesh B Gadhvi, MP, on February 4 wrote to the Prime Minister seeking to know if "the appointment of Secretary, Ministry of Petroleum & Natural Gas as the Chairman of PLL has the approval of Appointments Committee of Cabinet/ Prime Minister's Office".
He also wanted to know "whether the rules of governance permits the Secretary to hold the position of Chairman of PLL - a private company having clear conflict of interest with PSU companies as well as with other national/multinational private sector companies operating in the field of natural gas/LNG."
Oil Secretary has traditionally been the Chairman of PLL, the nation's largest importer of liquid gas.
Rae, who took over as the Oil Secretary on February 1, also is tipped to take over as the head of PLL, which was more than a decade back formed as a private company to import liquefied natural gas (LNG).
Though there is a Cabinet approval for its formation with oil PSU holding not crossing 50%, it is unclear if appointment of Secretary as its Chairman was ever approved.
"I am told that there is no other instance where the Secretary of Government of India is the Chairman of any private company operating under the jurisdiction of the Ministry of which the Secretary belongs," Gadhvi, who is also a member of the Consultative Committee on Finance, wrote.
In past there had been controversy over government officials on board of PLL accepting sitting fee as well as commission on profit.
A commission of Rs 10.44 lakh was paid/payable to the then Oil Secretary M S Srinivasan for 2006-07 and Rs 17.03 lakh for 2007-08 besides a sitting fee of Rs 60,000, according to PLL's Annual Report for 2007-08. Similar payments were made to representatives of BPCL, GAIL, ONGC and IOC - the four promoter firms of PLL.
This led to a controversy with some questioning how an a full-time official of a PSU or the Government can accept any remuneration from a private company to which he was a mere representative of the organisation that had employed him.
The commission etc was thereafter returned and PLL now pays the same to the Government or the respective PSUs only.
Gadhvi alleged "members (on board of PLL) have developed vested interest as PLL has become a source of income (from) a certain percentage of profit being distributed to them."
Under the government guidelines, nominee directors of PSUs/Government are not eligible to personally draw income or sitting fees, he added.
