CAG says no to Reliance on oil field audit response

In what is being seen as a startling development, Reliance Industries has been refused an opportunity by the CAG  to comment on its draft audit report which has indicted the Mukesh Ambani-run company for allegedly receiving undue favours from the oil ministry.

Along with Reliance, oil explorer Cairn India, which was also indicted in the draft report has been denied an opportunity to present its views on the audit objections.

According to sources close to the development, the ministry had on 22 June written to the CAG saying the audit observations were never discussed with either Reliance or Cairn and they had not been given an opportunity to respond to the strictures.

Responding to the oil ministry on the same day, the CAG said  its "audit mandate, scope and coverage" did not provide for seeking a response on its draft observations and the government could raise audit objections after it had finalised its report and the same was tabled in parliament, they said.

According to analysts, the CAG, during the audit of Reliance's eastern offshore KG-D6 gas fields and Cairn's Rajasthan oilfields last year, did not give the private operators a chance to explain the complex nature of their business. Rather, the CAG wrote audit memos and requisitioned which was fully complied with by the private operators.

According to sources, the CAG had a 90-minute session, with the operators in the first week of June this year wherein audit observations were not discussed nor was there any pre-set agenda for the meeting.