The CAG said that in the case of performance audit on hydrocarbon production sharing contracts, interactive meetings were held with two operators, including RIL, prior to the finalisation of the draft performance audit report
New Delhi: Government auditor Comptroller and Auditor General of India (CAG) today said that it had consulted Reliance Industries (RIL) before finalising the draft performance audit report on hydro carbon production sharing contracts at its KG-D6 gas fields, reports PTI.
“At no stage did this office (CAG) refuse any operator an opportunity to respond to observations made by us,” the CAG said in a statement while responding to reports that the auditor did not give an opportunity to RIL to present its views.
The auditor said that in the case of performance audit on hydrocarbon production sharing contracts, “interactive meetings were held with two operators, including RIL, prior to the finalisation of the draft performance audit report.”
However, in a letter dated 22nd June, the petroleum ministry said the CAG did not mention its observations or seek comments of the private firms on its audit objections during the interactive meetings it had with RIL and Cairn days before finalising its draft report.
Such non-disclosure was not in line with the production sharing contract because of which the government will not be reverse any cost recovery or disallow any expenditure, the government letter said.
The CAG said the performance audit follows a structured, systematic and objective architecture, which involves taking into account all relevant facts furnished by the concerned parties to ensure a balanced and objective reporting.
The government auditor said that as per the audit methodology the draft report was forwarded to ministry of petroleum and natural gas and ‘Entry and Exit conferences’ with the oil ministry as per the standard practice.
“It is for the ministry to take a view on what operator- specific points it needs to share, at this stage, with the operators,” the CAG said.
The CAG, in its 8th June draft report, stated that the oil ministry and its technical arm, the Directorate General of Hydrocarbons (DGH), favoured Reliance and Cairn by allowing them to retain their entire exploration acreage, turning a blind eye to increases in capital expenditure and giving additional area in violation of the Production Sharing Contracts (PSCs).
In the draft report, the CAG said rules were bent, enabling RIL to retain the entire 7,645 square kilometre KG-DWN-98/3, or KG-D6 block, in the Krishna Godavari Basin off the east coast.
Also, the development plan RIL submitted for Dhirubhai-1 and 3, two of the 18 gas discoveries in the KG-D6 block, was not in compliance with the PSC and the ministry and the DGH turned blind eye to the company raising capital expenditure without having begun work on the previous one.
Growth from credit growth is expected to moderate, due to the lower GDP growth projection; Net Interest Income expected to come down, but profitability is expected to remain at a healthy 18.5% on a year-on-year basis
According to a report released today by ICICI Securities, the banking industry as a whole will be able to shake off the (one-off) provision for retirement benefits and burden of the transition to system-based NPAs (Non-performing Assets) in FY11. The study also states that credit growth is expected to slow down to approximately 18%-19%, on a year-on-year (y-o-y) basis. NII (Net Interest Income) for the sample covered in the study is expected to decline from approximately 39% (y-o-y) to an estimated 16% in FY12.
However, according to the study, the profitability of the universe selected is expected to remain healthy, at 23% (y-o-y). This is despite the constant hikes in monetary rates by the Reserve Bank of India. But ICICI Securities says that the tight monetary regime has laid stress on the cost of banking funds, NIMs (Net Interest Margins) and asset quality.
The study also maintains that private banks have performed better than their public-sector counterparts, and these government-owned lenders may face pressure due to high NPAs due to their exposure to various power and infrastructure projects.
The report says that on the cost front, there was a divergence between public-sector banks (PSBs) and their older government-owned counterparts. These banks (both PSBs and older government entities) had to bear the brunt of higher NPA provisioning; provision for the second pension option and gratuity enhancement with on-off provision for retired employees.
The official monetary policy has lowered GDP (Gross Domestic Product) projection from 8.5% (previous estimates) to the 7.8%-8.5% range. This revision, says the study, "makes us (ICICI Securities) believe that our earlier estimate of 20% credit growth has to be revised from 18%-19% with the RBI also setting a target of 19% for FY12."
The report adds: "In India, the credit to nominal GDP (market prices) is 50% as against over 100% for China and many other neighbouring economies." This factor, says the study, "depicts that the opportunity for growth in credit is enormous if economic growth stays high."
Personal loans (almost 50% of them are housing advances) have remained stable, at 18% of total non-food credit. The study also notes that commercial real estate and NBFC (non-banking financial companies) loans remain an "area of concern," under the services segment.
Sahara India Real Estate Corp wants SEBI to expunge the parts of the order directing it to return money with interest to the investors as it has created a panic among the investors
New Delhi: The Supreme Court will hear on 4th July a Sahara group firm’s plea challenging a Securities and Exchange Board of India (SEBI) order directing the company to return money collected from investors through a scheme along with 15% interest, reports PTI.
A vacation bench of the apex court, comprising justices P Sathasivam and AK Patnaik, decided to hear the matter on 4th July, the first day after the vacation, after Sahara India Real Estate Corp today apprised the bench of its plea filed with the apex court registry.
The Sahara group firm sought directions to SEBI to remove the 23rd June order from its website and restrain the market regulator and its officials from publicising the order which it has challenged.
The counsel appearing for Sahara group firm said his client wants SEBI to expunge the parts of the order directing it to return money with interest to the investors as it has created a panic among the investors.
“The 99-page order (by SEBI) has created panic among the investors. They (SEBI) are holding press conferences and giving out press releases about the order,” he said.
The case will now be heard by a three-judge bench headed by Chief Justice SH Kapadia which has been hearing the case.