Government slaps additional $579 million penalty on Reliance

Total penalty on Reliance Industries for missing production target in four fiscal years beginning 1 April 2010 now stands at a cumulative $2.376 billion. The penalty is in the form of disallowing costs incurred

The Indian government has slapped an additional penalty of $579 million on Reliance Industries Ltd (RIL) for producing less than targeted natural gas from its KG-D6 block.


Dharmendra Pradhan, Minister for Petroleum and Natural Gas told the Lok Sabha that with this additional amount, the total penalty on RIL for missing the target in four fiscal years beginning 1 April 2010 now stands at a cumulative $2.376 billion.


The Minister said the penalty is in the form of disallowing costs incurred.


The Production Sharing Contract (PSC) allows RIL and its partners BP Plc and Niko Resources to deduct all capital and operating expenses from the sale of gas before sharing profit with the government.


Disallowing costs will result in government’s profit share rising by $195 million from 2010-11 to 2013-14, the minister said.


In a written reply to a question, Pradhan said gas output from the Dhirubhai-1 and 3 gas field in the eastern offshore KG-D6 block was supposed to be 80 million standard cubic meters per day (mmscmd), but the actual production was only 35.33 mmscmd in 2011-12, 20.88 mmscmd in 2012-13 and 9.77 mmscmd in 2013-14.


This year, the output has been only 8.05 mmscmd.


On 10th July, the Ministry issued a notice disallowing $579 million in cost for output lagging targets in 2013-14.


The Government had previously issued a notice to RIL disallowing $1.797 billion in costs for falling short of production during 2010-11 ($457 million), 2011-12 ($548 million) and 2012-13 ($792 million).


Pradhan said the issue is currently under arbitration.


“The Ministry of Petroleum and Natural Gas has also raised a claim of additional profit petroleum to the tune of $115 million to be paid by the contractor, on account of dis-allowance of cumulative contract costs of $1.797 billion, till 2012-13,” he said.


After including cost dis-allowance in 2013-14, the total additional profit for petroleum claimed from RIL comes to $195 million, he said.


“GAIL and Chennai Petroleum (who buy oil and gas produced from KG-D6 block) have been directed to remit the sale proceeds of crude oil/ condensate/ natural gas from KG-DWN-98/3 (KG-D6) block, which falls due immediately into the Government account so as to recover an amount of $115.26 million at the rate of 50% by each company and deposit the same with the government,” he said.


The Minister said RIL had put up production facilities to produce 80 mmscmd of gas but “has failed to adhere to the approved field development plan in terms of drilling and putting on stream the required number of wells''.


The Ministry and its technical arm Directorate General of Hydrocarbons (DGH) blames non-drilling of committed wells for the production lagging targets, while RIL and its partners say unexpected geological complexities like sand and water ingress led to output fall.  




2 years ago

The Government alleges that Reliance is under producing from its gas fields due to a pricing issue over gas.The Company states that unexpected geological conditions are the reason for under production.

Prithvi Info Solutions: Second largest stakeholder denies investing in the company!

US-based Sarat Kumar Addanki, the second largest stakeholder of Prithvi Information Solutions, has made sensational allegations of fraud, mismanagement and possible identity theft against the promoters. He has complained to SFIO, SEBI, RBI and stock exchanges. Will they finally act against Prithvi? 

In an amazing set of allegations, Sarat Kumar Addanki, a US citizen and person of Indian origin (PIO), listed as the second largest stakeholder of the Hyderabad-based Prithvi Information Solutions Ltd (Prithvi), has denied buying or holding a single share of the company and accused the promoters of fraud, identity theft and worse.

Mr Addanki, who is shuttling between the US and India due to his mother's illness has also written to the regulators to inform them of the con. Moneylife has copies of his letters to the Serious Fraud Investigation Office (SFIO), the Securities & Exchange Board of India (SEBI) and the Reserve Bank of India (RBI). The letters dated 24 June 2014, allege gross mismanagement, misrepresentation, fraud and potential identity theft. Mr Addanki is shown as the second largest shareholder of Prithvi Information Solutions on stock exchange records provided by the company. He spoke at length with Moneylife to explain how he had been conned. What is worse still, is that one of the promoters of Prithvi, Ms Madhavi Vuppalapati was a former classmate of his in Hyderabad.

Curiously enough, despite repeated revelations about the apparent fraud at Prithvi Info Solutions and the legal battle it has been losing against its creditor, Kyko Global Inc of Canada, the regulators have yet to initiate any action. The story so far is as follows:

In September 2012, Anupama Yellajoshyula and Sarat Kumar Addanki were allotted shares under preferential allotment as the 'non-promoter group'. Through these allotments, Anupama became the owner of 86.47 lakh shares (24.99% of total shares) having a face value of Rs10 each, at a premium of Rs16 for Rs22.48 crore, while Sarat Kumar became the owner of 78.80 lakh shares (22.77% of total shares) for Rs20.49 crore during September 2012 with a one year lock-in period. However, Mr Addanki denies buying or holding any of these shares in Prithvi.

In his formal complaint to the authorities, Mr Addanki says, "…sometime in the last week of May 2014, I was approached by Kyko Global Inc, Canada who is a creditor of Prithvi. I also saw the article that was published by website '' on 29 May 2014 and I was shocked to read that I am the second largest shareholder of the Company, with a holding of about 23% shares (78.81 lakh shares of Rs101- each at an exercise price of Rs261- per share), which were acquired in mid-2012 at a cost of about Rs20 crore."

Addanki said he had forgotten about this incident till he was approached by Kyko Global.
He then came across articles written by Moneylife and some publicly available records like details of allotment, EOGM notice and minutes of the meeting. "After allotment of shares, a disclosure is filed with BSE and NSE, purportedly signed by me, which in fact is not signed by me. Apparently this looks like a 'benami' transaction and my identity is being used by some fraudsters to acquire and hold shares of Prithvi," he alleged.

"From the information available, it appeared to me that the company is highly mismanaged, involved in various frauds and the affairs are being managed in a way prejudicial to the interest of stakeholders," Addanki added.

According to Addanki, in early 2012, Madhavi Vuppalapati, his friend from college days, suggested that he make some investment in her company, Prithvi Information Solutions. Initially he was interested in making a small investment in a legally permissible way. He said, "During the initial discussions, she asked me to fill out certain forms as well as send her a copy of my passport and other identification documents, which I did."

On 21 May 2012, Addanki said, he received an email from Guru Pandyar, vice president for finance at Prithvi, requesting him to send duly completed share account opening forms through a prepaid FedEx label." Subsequently Mr Pandyar called me and informed me that Prithvi will be transferring money to my personal bank accountm, which I can then use to buy Prithvi shares. I could not understand why they would send me funds to make an investment in their own company. However, sensing that there was something odd about this, I backed out of the investment and did not comply with their request for documents nor did I accept any money from them for the investment. I terminated all discussions on this investment and specifically sent Ms Madhavi Vuppalapati a message requesting her to desist from taking any actions pertaining to the investment," Addanki said.

Reiterating that he had not made any investment or remittance from any of his bank account to fund the purchase of Prithvi shares, Addanki raised questions on how the compliance of Foreign Exchange Management Act (FEMA) was done for this particular investment.

Addanki said, "I have not signed any share application form or any other documents giving my consent to this investment. I don't hold any demat account in India nor have I received any share certificate as evidence of issue of these shares in my name. Furthermore, I have not received any communication from Prithvi as a shareholder of the company, like notices of General Meetings. Annual Reports and any other communication as a shareholder".

"Based on the above, it seems clear to me that my identity has been stolen by somebody to acquire and hold about 23% shares of Prithvi worth Rs20 crore. The money has not been paid by me to buy these shares and I am puzzled how such a large sum of money in US dollars was transferred to buy this big chunk of a publicly traded company. I wish to emphatically state that I have neither applied nor subscribed for the shares of Prithvi in question nor am I a shareholder," he said in the complaint.

Mr Addanki also goes on to talk about the other large shareholder inducted into Prithvi Info Solutions. Referring to our writing, he says, "The Moneylife article also states about the largest shareholder being Ms Anupama Yellajoshyula, who is also a US citizen and is the wife of one Srikant Swarna. I understand Mr Swarna is an equity holder of a Prithvi subsidiary called Agadia Systems Inc, based in New Jersey. Mr Swarna, Madhavi Vuppalapati (chairman of Prithvi) and I attended the same college in Hyderabad. Therefore I called Mr Swarna and he was equally surprised that his wife is the largest shareholder of Prithvi. With these two shareholders holding almost 48% of Prithvi equity, there appears to be some mystery around the method of funding of these shares too," Addanki said in his complaint.

Interestingly, a legal firm claiming to represent Ms Yellajoshyula has written to Moneylife asking us to "cease and desist" from writing about her. The firm, New York-based Olshan Law (Olshan Frome Wolosky LLP), says , "We hereby demand that you cease and desist from making such statements and from publishing Ms Yellajoshyula's confidential information."

“Ms Yellajoshyula has become entangled in the pervasive, systematic fraud perpetrated by Madhavi Vuppalapati and Satish Vuppalapati and their myriad Prithvi companies. There is 'no information' about Ms Yellajoshyula's ownership of any Prithvi shares because no such information exists; any source that claims to the contrary, including any of Prithvi's judgement creditors, is making false, misleading statements and will similarly be subject to legal action to the fullest extent possible,” Olshan Law, says in the letter.

(Shareholding pattern of Prithvi Information Solutions as on 31 Match 2014 Source: BSE)

Addanki has requested the authorities to investigate the matter and find out the source of these funds used to purchase the shares of Prithvi Info Solutions in question, the real owners of these shares and persons who are behind these fraudulent and illegal activities which include theft of his identity and fabrication of documents, and take appropriate actions against the culprits.

Officials from the SFIO, SEBI, NSE and BSE were not immediately available for comments. Our emails remained unanswered till writing the article. We would incorporate their views as and when we receive it.



You may also want to read...

Who is Anupama, the largest stakeholder of Prithvi Info Solutions?


Prithvi Info founder asked to testify before US Bankruptcy Court


How & Why Prithvi Catalytic changed its name to Abilius


Prithvi Info Solutions: Why regulators are silent over the scandalous saga?


Prithvi Info Solution founder's assets auctioned to recover $17 million penalty


Prithvi’s recent acquisition despite multiple scandals and losses raises a stink


Scam: SEBI Finally Wakes Up


Prithvi: No Disclosures


No Questions Asked




2 years ago

It is quite sad despite such a huge fraud in US , indian news dosnot report , nor do our financial institution take action

Dayananda Kamath k

2 years ago

he would have got results already if he had approached american authorities than the indian authorities. in india sebi is the biggest culprit along with sfio rbi and bankers. rbi itself is facilitator for fema violations. they issue a circular after 5 years that third party import of gold is violation but does not initiate action even after complaint. they even do not help the auditor who reported these violations and who was harassed by the banks executives who are responsible for this. and the karnatak highcourt also support the bank saying the stickler for rules can be eased out by the employer. the meaning of golden hand shake is not something extra than what is such a country such things will continue to happen.


2 years ago

sathyacumaran dhandapani
its waste in reporting to sebi or sfio as they are all hand in glow with bankrupcy company and the accounts of most of the IT companies expect Infosys all the companies accounts are fudged hence this problem which sebi is well aware they blindly close their eyes


2 years ago


Robinson Worldwide case: SEBI freezes demat, bank accounts of six entities

SEBI has asked to recover Rs8.93 lakh from Mangiram Sharma, Rs6.87 lakh from DPS Shares & Securities, Rs3.76 lakh from Sachin Patil, Rs91,537 from RajKumar Dinesh Masalia and Rs91,521 each from Sujal Shah and Pratik Shah

Market regulator Securities & Exchange Board of India (SEBI) has ordered attachment of bank and demat accounts of six entities to recover dues worth over Rs22 lakh in the Robinson Worldwide Trade Ltd case.


SEBI has asked to recover Rs8.93 lakh from Mangiram Sharma, Rs6.87 lakh from DPS Shares & Securities, Rs3.76 lakh from Sachin Patil, Rs91,537 from RajKumar Dinesh Masalia and Rs91,521 each from Sujal Shah and Pratik Shah.


The dues include penalties imposed on the entities on charges of violating capital market norms in the matter of Robinson Worldwide Trade Ltd.


In six separate attachment orders dated 11th July, SEBI has asked banks to attach all accounts, including lockers held by the entities.


Similarly, the regulator has directed depositories - NSDL and CDSL -- to attach all demat accounts of the defaulters.


SEBI informed the banks and the depositories that there was "sufficient reason" to believe that defaulters may dispose of the amounts in the accounts and "realisation of amount due under the certificate would in consequence be delayed or obstructed".


The regulator has also asked banks to attach the lockers held by the entities as well as "all other amount/ proceeds due or may become due to the defaulters or any other money held or may subsequently hold for or on account of defaulter".


It has further ordered the banks and depositories that with immediate effect no debit would be made in these accounts until further directions from the market regulator.


However, the credits, if any, into the account may be allowed, SEBI said.


The regulator has also asked for various details of the accounts held by the entities, including account statements.


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