Thursday, September 17, 2009

sibal - mr crony capitalism

The Pioneer's investigation on Thursday on the nexus between RIL and DGH VK Sibal has once again exposed the allegations of crony capitalism in India's bureaucracy. What is perhaps more intriguing is Sibal's reaction to the expose where he brazens it out by saying - so what?

Here is the Pioneer lead story. Judge for yourself:

CVC examining use of RIL facilities by DG Hydrocarbon’s daughters Caesar’s wife must be above suspicion”: The famous saying holds relevance even today, particularly for those who are in public service. But, some just don’t care. VK Sibal, the Director General Hydrocarbons whose extension of tenure is under CVC scanner, is suspected to have taken favours for his daughters — Priya and Sonia Sibal — from Reliance Industries Limited (RIL), the company whose capital expenditure plan for KG Basin was increased from $2.4 billion to $8.8 billion in 2006. Sibal had given the approval for this. In this connection, Sibal had raised a controversy when he declared that, in 2005-06, CAG had approved the capital expenditure of KG D6 fields, a claim the CAG denied stating that no such approval had been accorded.Sibal is to end his tenure on October 31, 2009. But the Minister of Petroleum has recommended two-year extension for him, which needs clearance from the CVC. However, the CVC is in a fix following complaints of Sibal’s proximity with several business contractors whose project clearances were accorded by him.Even while RIL’s request for increasing capex for KG basin was pending before Sibal, the information with The Pioneer indicates that Sibal’s daughters used posh RIL guesthouses in Mumbai extensively for four-five months.As Director General Hydrocarbons, Sibal would not have faced any problem in arranging a guesthouse for his daughters in Mumbai, as all public sector oil companies, including ONGC, IOC and GAIL, have such facilities in the metropolis. But his choice for RIL’s guesthouse raises eyebrows, as it is inappropriate to accept favours from a contractor, who is coming for sanction of his projects.Sonia Sibal stayed at a VIP guesthouse of RIL — Dalal House — from July to November 2005. Dalal House is said to be the erstwhile residence of Nita Ambani. In November same year, Sibal's another daughter Priya Sibal also stayed at Dalal House. Later, from April to July 2006, Priya stayed at another guesthouse of RIL —Trivoli Guest House — at Hiranandani in Mumbai.According to sources, the CVC is also looking into the ‘relationship’ between Sibal and RIL, especially when hands off distance should have been maintained.The matter does not end here. Later, Priya moved out of RIL’s guesthouse and shifted to a spacious 3BHK flat in Avalon at Hiranandani Gardens, Powai. But, the host still remained the same. This is how: RIL acquired a small firm called Whitesnow Trading Private Limited in May 2008 and the flat was bought in the name of Whitesnow in the same month.Whitesnow Trading Private Limited was incorporated in March 2006 by Vijay Dargar and Reena Dargar. After RIL’s acquisition in May, officials of RIL — Nilesh M Mehta and Deepa Sangani —were appointed directors of Whitesnow.Priya's stay in this flat can be proved from the fact that Whitesnow, in a letter dated June 7, 2006, wrote to the apartment asking them "to issue club house ID card to Priya and her family". The demands made by Priya in her e-mail on July 17, 2006 included an LG television and refrigerator and Whirlpool washing machine.The guest was so important for RIL that top notch officials of the company "personally" took care of making her stay comfortable. The supervision of furnishing, furniture and installation of white goods worth Rs 6.5 lakh in the flat was "personally" was done by president of RIL's Oil and Gas Division PMS Prasad and chief financial controller LV Merchant. They approved these expenses also.Sibal has been continuously saying that his relationship with RIL is "only official". These words even found resonance in his reply to Director (Vigilance) Maninder Singh in December 14, 2007. Do these personal care accorded by RIL officials signify the relation being official in any way, as claimed by Sibal?It's altogether a different matter that Priya moved from Avalon after 18 months of stay to another flat in Oshimara, Andheri West, purchased at a cost of Rs 1.7 crore. But for Sibal, the practice of taking favours from contractors seems natural. Unethical it might be, but Sibal continues to avail favours from his contractors. His present residence in Noida is rented to him by a company called Ambience Exim Private Limited. Sibal might like to call this a coincidence, but this company "secured oil and gas block in the Government of India's auction process".VK Sibal: I didn’t favour RIL in exchange.

The Pioneer sought VK Sibal’s response with regard to the allegations. This is his response:“My daughter, Priya was staying in various locations in Mumbai since the year 2001. She was staying in a private accommodation in Kalina, Mumbai, in the year 2005. However, during the floods in Mumbai, the area she was staying got flooded due to which she went missing for 2 days and had to shift to an apartment located on higher grounds for a few days as a stop-gap emergency measure.My daughter Sonia was studying in the Institute of Hotel Management, Aurangabad, during the period 2004-07 and was staying in a hostel.My daughter Priya had a lease agreement with the party for the flat in Hiranandani referred by you for which advance was also paid. An amount of Rs 3 lakh and utility charges of Rs 3,000 per month was paid. She stayed off and on with her friend in the same accommodation. Necessary documentary evidence in support of this is available with us. Notwithstanding the fact that this is a bonafide arrangement, it is surprising that you should allege that favours have been taken from RIL. If these allegations were true, there would not have been any need to pay the advance or the utility charges to the owner. Contrary to your allegation that favors were taken from RIL, a penalty was imposed on RIL during the period October-November 2006 amounting to approximately Rs 89 crore against unfinished work programme in their petroleum exploration acreages, details of which are available with us.I do not understand as to why you should link purely official responsibilities with bonafide personal dealings. I am sure that you can understand the hidden agenda of the people behind these allegations and propaganda. The story has been circulated among the media surreptitiously by vested interests. It is surprising that a well-known newspaper should fall prey to the machinations of a vested interest. Despite the above clarifications, if you still want to publish the story, it will be even more obvious that a section of the media has been pressurised or influenced by an interested party.”


rakshanda said...

strangely despite such revelations Petroleum Minister Murli Deora seems to have tremendous faith in DGH Sibal. Why else despite the Comptroller and Auditor General (CAG) nailing Sibal’s lie about CAG approval for RIL’s capex, Sibal is being recommended by Deora for a two-year extension of his tenure which otherwise ends next month?

Normally the minister in charge of the administrative ministry okays a file regarding extension of tenure or appointment of a senior official or public sector executive only after the ministry officials put up the papers on completion of the due process. An inevitable component of the process is the vigilance clearance. In the case of DGH Sibal, the ministry is still in the process of obtaining the vigilance clearance and even the Petroleum Secretary has not vetted the file, but Deora is understood to have cleared the extension!

George said...

V.K. Sibal’s vehement denial notwithstanding, the real nature of his “official” relationship with RIL now stands exposed. And if one were to consider the Director General of Hydro Carbon’s earlier claim about CAG’s approval of RIL’s capital expenditure which was disproved immediately by the CAG, this is yet another example of how senior functionaries of the government are hands-in-glove with big corporates. Your story convincingly establishes beyond doubt Sibal’s connections with RIL, which is presently under a cloud of suspicion on the pricing of its KG basin gas. His denial sounds pathetic.

Shivangi said...

It illustrates how corruption is incorporated in the system top to bottom. It is appalling that VK Sibal took favours for his daughters and in return increased the capex for RIL by a whopping 400%.

I truly hope that the article is an eye-opener for the officials and strict measures are adopted to bring the guilty to justice. I urge you to take this forward and not let this be just another case where the powerful get away with anything.

Gautam said...

The whole episode is an epitome of corruption being an integral part of the system and I appreciate that you brought it to the forefront. This give and take of undue favours has immensely affected the country, with the Ambanis being the most influential name in the corporate world and the quantity of gas being enormous. The underlying truth for VK Sibal increasing the capex exorbitantly cannot be overlooked.

This unethical deed should not be ignored and I strongly advice you to take this forward.

Gautam said...

The article has unambiguously brought forth that the name VK Sibal is synonym of corruption. Till when will we allow these Government officials who pledge to serve us but instead serve the business hot shots for their vested interests?

Nikhil said...

Is being unethical the new ethic?
The article is a revelation about corruption being deeply entrenched in the system. The onus of blowing the gas controversy out of proportion somewhere lies on VK Sibal’s shoulder. He was the one who sanctioned the capex by RIL. It’s high time the guilty should be reprimanded.

DEEPAK said...

I see that most of people who have commented on this article this very vehemently without intriguing in this matter. FIrst of all ask yourself that benefitting approval of 6 billion US$ than what it was supoosed to be, than at Mr. sibal Place i would have taken 10% of it i.e 6 milion Us$, but staying in guest house just because you r daughter of operator not makes sense. Even today i being working in this organization would have got this accomodation, during my visit to Mumbai. So than i would be next in line to Mr. Sibal to take undue benefits of Rs. 1500 per day stay in his guest house.

So think rationally about this and comment.