Mumbai: The Central Bureau of Investigation (CBI) on Friday conducted searches at 10 places in Delhi, Dehradun, Noida and Mumbai after registering a criminal case against former officials of the Directorate General of Hydrocarbons (DGH) on Thursday for allegedly favouring Houston-based GX Technology (GXT) in carrying out “seismic survey in lieu of personal favours”, the investigative agency said.
“A contract was awarded to the private company for conducting seismic speculative survey on nomination basis at an exorbitant cost and this caused huge financial loss to the government,” CBI said in a press release in Delhi on Friday.
Of the eight persons who have been named in the first information report (FIR), seven belong to DGH and the eighth is a GXT executive. The private firm is also named in the FIR, according to the CBI press release.
DGH is a government body that manages the petroleum resources of the country and comes under the purview of the petroleum ministry.
Searches were also carried out at the residence of former director general of hydrocarbons V.K. Sibal for allegedly causing a loss of Rs 400 crore to the exchequer, according to a CBI document that Mint has reviewed. Sibal is also in the centre of another controversy over Reliance Industries Ltd (RIL) allegedly inflating development costs on the D6 block in the Krishna-Godavari (KG) basin, as alleged by the Comptroller and Auditor General of India.
“Sibal was present in the house when it was being searched. He denied any wrongdoing. He will be called for questioning,” said a senior CBI official, who did not want to be identified. “The case was registered after two years of preliminary enquiries (PEs). A total of three PEs have been registered probing allegations against Sibal. One of these PEs was converted into a regular case after we found substantial evidence against him and others. A decision will be soon taken on converting other PEs into FIRs,” he added.
While a GXT spokesperson didn’t respond to phone calls and messages left by Mint, Sibal couldn’t be reached as his cellphone was switched off.
The searches come in the backdrop of charges of corruption and a steep rise in prices, especially of food and fuel, and will give the opposition parties added ammunition to attack Prime Minister Manmohan Singh’s government. Petroleum minister S. Jaipal Reddy had earlier said the government will strengthen the office of DGH.
According to the CBI investigation report reviewed by Mint, the seismic survey was awarded to GXT without going for global tendering.
Also, DGH didn’t carry out any technical evaluation of the 2D (two-dimensional) speculative seismic survey, nor was GXT’s proprietary technology certified by any competent authority.
Scientists from the National Institute of Oceanography, state-owned Oil and Natural Gas Corp. Ltd and a former consultant to DGH, S.P. Painuly, told CBI that the technology used by GXT was not proprietary.
“There was no follow up by DGH officials regarding non-submission of quarterly statement of sales by GXT within 30 days of the completion of a quarter,” said the CBI official cited above. “Also, DGH officials didn’t inspect the books of GXT due to an ulterior motive.”
CBI started its investigations after it received complaints from the Central Vigilance Commission (CVC), which oversees the functioning of government agencies and state-owned firms, and the department of personnel and training against Sibal. It was also alleged that Sibal owned a stake in GXT, according to the CBI document cited above.
Sibal was earlier caught in the crossfire between the feuding Ambani brothers, with the petroleum ministry not extending his term in 2009. The CVC had also asked CBI to look into allegations of a nexus between Sibal and RIL.
Reliance Natural Resources Ltd had earlier alleged that RIL had “gold-plated” exploration costs in KG-D6 by nearly four times—from $2.47 billion (Rs 11,016 crore today) in 2003 to $8.83 billion—to undermine its demand for cheaper gas. RIL, an oil-to-yarn conglomerate, is controlled by Mukesh Ambani. RNRL is controlled by his brother Anil. The feud between them was resolved earlier this year.