The oil ministry’s directive of prioritising gas supplies followed a sharp drop in output at the KG-D6 fields. Production fell from 61.5 mmscmd achieved in March 2010 to under 50 mmscmd currently, instead of rising to about 69 mmscmd as was projected previously
New Delhi: Falling in line with an oil ministry order, Reliance Industries (RIL) today cut natural gas supplies to non-core users like refineries and steel plants so that full demand of fertiliser and power plants can be met, reports PTI.
Reliance from 0600 hours today started implementing the ministry’s priority allocation order which had asked it to first supply natural gas from its eastern offshore KG-D6 fields to priority sector like urea-making units and power plants.
Supplies to non-core refineries, petrochemical units and sponge iron plants will be made only if there are any volumes left after supplies to priority sector.
“Reliance this morning curtailed gas supplies to non-core users, including its own refineries and petrochemical plant,” an industry official said.
The oil ministry directive followed a sharp drop in output at the KG-D6 fields. Production fell from 61.5 million metric standard cubic meters per day (mmscmd) achieved in March 2010 to under 50 mmscmd currently, instead of rising to about 69 mmscmd as was projected previously.
When contacted, a Reliance spokesperson did not offer any comments.
Output at KG-D6, the nation’s largest gas field, is just enough to meet the contracted demand of fertiliser units, power plants, LPG extraction units and city gas distribution firms that sell CNG to automobiles and piped cooking gas to households.
In face of falling output, Reliance had made a pro-rata cut in supplies of all its customers including priority users, the official said.
Of the 57.17 mmscmd of KG-D6 gas for which contracts have been signed, 9.57 mmscmd has been cornered by steel, petrochemical and refineries sector.
Essar Steel had signed up for 3.2 mmscmd, Welspun Maxsteel 0.40 mmscmd and Ispat 0.59 mmscmd. Besides, Reliance’s petrochemical plant gets 1.17 mmscmd and a sizeable 4.21 mmscmd goes to refineries including the Jamnagar units of Reliance.
“Supplies to non-core users has not dried up completely as Reliance has some gas left after meeting priority sector requirement,” the official said pointing to Essar Steel getting 0.6 mmscmd today against 2.8 mmscmd that it was drawing till yesterday.
Reliance had previously resisted implementing the order but fell in line once the ministry cited last year’s Supreme Court directive that held that only government had the right to decide users of the gas.
Welspun Maxsteel and Ispat last week approached the Bombay High Court seeking a stay on the ministry order, while Essar has approached the Delhi High Court. None of the courts have so far stayed the order.
The growth in revenue is largely due to the addition of 1,320MW power generation capacity in FY10-11, taking the total power generation capacity of Adani Power to 1,980MW,” the company said in a regulatory filing
New Delhi: Adani Power today posted a 77% jump in profit after tax to Rs174 crore for the three months ended 31st March, up from Rs98 crore, helped by higher revenues from increased power generation capacity, reports PTI.
Revenues in the March quarter soared to Rs856 crore from Rs201 crore in the year-ago period.
“The growth in revenue is largely due to the addition of 1,320MW power generation capacity in FY10-11, taking the total power generation capacity of Adani Power to 1,980MW,” the firm said in a regulatory filing.
Currently, Adani Power is implementing 16,500MW of power generation projects across seven locations in India.
“With such a robust financial performance, we are confident of meeting our target of generating 20,000MW by 2020,” Adani Power chairman Gautam Adani said.
The company's profit after tax climbed to Rs524 crore for the 2010-11 fiscal year from Rs171 crore in the same period a year ago. It raked in revenues to the tune of Rs2,106 crore for the year ended 31 March 2011, much higher than the Rs435 crore figure for the previous fiscal.
Adani Power’s gross generated units stood at 7.6 billion in FY10-11, compared to 1.4 billion in FY09-10.
“Units sold during the year stand at 6.8 billion, as compared to 1.2 billion in FY09-10,” the filing said.
The former member of the SEBI Board, in a letter to the prime minister, alleges how an "informal clique of current and serving bureaucrats, SEBI officials, lawyers and corporate interests orchestrated a subversion of the due process of law". It vindicates Moneylife's stand on various regulatory issues that large media houses have been ignoring
Dr G Mohan Gopal, who heads the National Judicial Academy (NJA) at Bhopal, is in the news for his letter to the prime minister, pointing to “the gross abuse of power and corrupt practices in the SEBI board” to “protect SEBI Chairman CB Bhave”. Moneylife Foundation has accessed the letter written to Dr Manmohan Singh on 24 December 2010, which was obtained by activist Subhash C Agarwal using the Right to Information Act (RTI).
The letter, we find, is far more explosive and detailed than has been indicated by media reports so far. Dr Gopal has not only described the manner in which SEBI systems and processes were vitiated to protect Mr Bhave, but it also highlights four “structural flaws” in the “legal framework for securities regulation”, something that other self-appointed market experts have been labelling as perfect and getting favourable mention in the media.
Moneylife has already reported at length on the NSDL issue, which Dr Gopal describes as “ ’Sebi-under-Bhave’ judged and exonerated ‘NSDL-under-Bhave’ through a process that was thinly disguised as independent, but was, in fact, deeply vitiated and subverted”.
Here are highlights of the many larger issues raised by Dr Gopal, on which the prime minister’s office has remained silent for the past five months.
On subversion of the action against NSDL: Dr Gopal says, “an informal clique of current and serving bureaucrats, SEBI officials, lawyers and corporate interests orchestrated this subversion of the due process of law. They illegally interfered with independent SEBI adjudication, manipulated legal opinions, suppressed and misrepresented facts and misled the SEBI Board and Government officials about the legality of the Orders. Law, regulations and established precedent were violated. NSDL was given undue special treatment. NSDL was relieved of a fine of crores of rupees, and SAT decisions adverse to SEBI but favouring NSDL, were not appealed to the Supreme Court as they should have been”.
On how the SEBI Board declared orders against NSDL as void: Dr Gopal says, “One of the most shocking and unprecedented actions taken by SEBI to exculpate NSDL was the board–for the first time in SEBI’s history–setting aside quasi judicial orders which are, under the law, subject only to judicial review. He goes on to describe how the SEBI board “entirely disregarded” a statement by one of India’s most eminent and respected jurists (former chief justice of India, J S Verma) who had said that SEBI’s action “violated established legal and Constitutional principles”.
On securities law: Dr Gopal says, four structural fault lines in the legal framework for securities regulation made this abuse of power possible. These are:
1. Inadequate transparency, public accountability; and parliamentary oversight: Dr Gopal points out that unlike in India, the US Securities Exchange Commission meetings are open to the public and the US Senate exercises close scrutiny over its workings. There is nothing comparable in India. There is also no framework for whistleblower protection. Dr Gopal points out how he was subjected to retaliation and attack without any protection. (It is stunning commentary of the poor governance in India that an extremely privileged and connected member of society, who heads a premier institution like the National Judicial Academy should complain of such harassment). Importantly, Dr Gopal joins voices like ours at Moneylife when he says, that there is ‘a serious deficit in investor voice’, essential for effective governance. He says, ‘SEBI needs to encourage investor voices instead of being hostile to them unless they are friendly, in which case selective patronage may be extended to them’. Some of the friendly voices which receive selective patronage are large media houses.
2. Lack of protection against conflict of interest: Dr Gopal says that a Code of Conduct for the SEBI board was evolved at his instance, but the “mechanism was violated and then dismantled in the context of the NSDL matter”. He says, that whole-time members of the SEBI board who were to be explicitly excluded from NSDL matters (since they report to the SEBI chairman operationally) were included in the decisions to favour Mr Bhave. Dr Gopal points to the role of Mr Mohandas Pai, who represented a SEBI-regulated entity, to chair the meeting that finally exonerated NSDL. The SEBI board, he says, “generously excused the conflict of interest arising out of the business relationship between Infosys and NSDL”. Also, “it was perhaps for the first time in Indian history that judicial power was exercised by a serving private sector corporate official”. As a result of these conflicts of interest, an influential bureaucrat-corporate-media nexus has emerged that has immense power to influence SEBI decision-making to its own advantage.
3. Ineffective framework for law enforcement: Dr Gopal says that the structure for law enforcement in SEBI is seriously flawed (something that Moneylife has repeatedly pointed out). There are overlapping enforcement and punitive provisions in the Act, which need to be rationalised. This subjects a regulated entity to multiple proceedings without a clear distinction between them. He also says, as we have in the past, that “major violations” established through investigation “are excused without punitive action through opaque consent orders and faulty adjudicator orders favouring wrongdoers–in such cases review by SAT (Securities Appellate Tribunal) would never be sought” because neither SEBI nor the wrongdoer want it. Consequently, “investors at large and the market are the voiceless victims”. Dr Gopal points out to how a company guilty of “criminal market manipulation” was let off by a whole-time member asking it to “be more careful in future” (we believe this refers to the Zee group’s role in the Ketan Parekh scam). He says, SEBI does not have “adequate focus and priority on law enforcement”, with the result that it bent “backwards and violated the law to protect a favoured regulated entity rather than pursue it to enforce the law”.
4. Outdated governance structure: Under this head, Dr Gopal says that the SEBI Act badly needs to be redesigned. It contains “too many explicit and implicit levers of bureaucratic and political control of the regulator on one hand and too little public oversight, transparency and public accountability on the other hand. SEBI in effect is run by an informal caucus of serving or former civil servants rather than domain experts”. Having said that, Dr Gopal accuses the finance ministry representative (Dr KP Krishnan) of exercising “undue influence in the functioning of an independent regulator through informal back channels, through which SEBI officials were funneling information and documents to him, which he legally should not have access to. Dr Gopal says, “the government’s interaction with the regulator would be ‘over the counter’ and not ‘below the table’.” Apart from this stunning indictment, the former SEBI board member, also says how SEBI and the National Institute of Securities Management (its education affiliate) “command huge financial resources with little accountability and transparency in its use”. Further, the SEBI board “lacks relevant expertise” because it is “dominated by babus–serving and ex-bureaucrats”.
Dr Gopal ends his five-page letter by asking the prime minister to order a high-level inquiry into SEBI decisions in relation to NSDL during Mr Bhave’s tenure and to look into the structural issues raised by him.
What did the Prime Minister do? He merely forwarded the letter to the finance ministry. Frankly, even today, this explosive letter by Dr Gopal will probably attract some media attention, only because SEBI has been forced to do an about-turn due to the activist interest shown by the Supreme Court of India into the manner in which SEBI has been subverting regulations.
Here is a copy of the letter written by Dr Mohan Gopal to the prime minister