rkt.india Posted November 1, 2012 Posted November 1, 2012 After taking on political leaders such as Salman Khurshid and Nitin Gadkari on their alleged acts of corruption, Arvind Kejriwal's next target appears to be big corporate houses. Taking on Reliance on the basis of the Radia tapes, Kejriwal and IAC have charged the business house and the government of crony capitalism. Accusing the government of collusion with Reliance, Kejriwal alleged that Reliance deliberately keeps gas production low to blackmail the government. http://indiatoday.intoday.in/story/kejriwal-reliance-radia-tapes/1/227041.html [ame=http://www.youtube.com/watch?v=xTfgNrHW4bM]Kejriwal's latest: Govt is being run by Reliance - YouTube[/ame] Allegations by India Against Corruption against Reliance Industries Limited: Full Text New Delhi: Arvind Kejriwal today exhumed the Niira Radia tapes to expose what he claimed was the hold of corporations over the government, specifically naming Reliance Industries Limited (RIL) owner Mukesh Ambani, who he said was "running the country". Here is the full statement by India Against Corruption against Reliance Industries Limited: In 2006, Mani Shankar Iyer was removed and Murli Deora brought in to increase RIL capex from $ 2.39 billion to $ 8.8 billion and to increase gas price from $2.34 per mmBTU to $ 4.2 per mmBTU. In 2012, Jaipal Reddy has been removed and Moily brought in to increase gas prices from $4.2 per mmBTU to $ 14.2 mmBTU and to condone RIL's blackmailing of reducing gas production. Huge benefits given to RIL in last one decade despite flagrant violations of various agreements by RIL. Benefits to RIL causing serious price rise in the country. Both BJP and Congress involved. BJP signed a sweet deal with RIL in 2000. Congress faithfully implemented it. If RIL demand of increasing the gas price to $ 14.2 is accepted, it would lead to shut down of several gas based power plants and increase in power and fertilizer prices. It would result in Rs. 43,000 crores of additional benefits to RIL. In the Nira Radia tapes, Ranjan Bhattacharya (Vajpayee's son in law) is heard telling Nira that Mukesh Ambani told him -"Congress to ab apni dukaan hai." Facts below show that both Congress and BJP are in his pocket. Reliance Industries Ltd (RIL) has the contract to extract oil from KG Basin. Under an agreement of 2009 with the government, they are supposed to sell gas at $ 4.2 per mmBTU upto 31st March 2014. Midway now, RIL is demanding that the price be increased to $ 14.2 per mmBTU. Jaipal Reddy resisted that and he was thrown out. Jaipal Reddy had prepared a note for EGOM, in which he mentioned that acceptance of RIL's demand would mean an additional profit of Rs43,000 crores ($8.5 billion) to RIL(in 2 years) at current levels of low production. Most of this gas is used in fertilizer and power production. Increasing gas price would mean an additional financial burden of Rs. 53,000Crores ($ 10.5 billion) on central and state government (copy of relevant page of EGOM note is attached as annexure 1). This would in turn mean higher electricity and fertilizer prices in the country or a higher subsidy burden. In order to pressurize the government, RIL substantially reduced its production of natural gas. Total consumption of natural gas in the country is 156 mmscmd. According to agreement, RIL was supposed to produce 80mmscmd (more than 50% of the total demand) from 2009. However, they are producing just 27 mmscmd, almost a third of their commitment. Production has been artificially kept low to blackmail the government. They are not just hoarding the gas, but also forcing various consumers to buy gas from abroad. Gas from abroad costs around $ 13 per mmBTU. RIL's stand is simple - "hum to gas $14.2 par hi denge, lena hai to lo, nahin to jao." Who does this gas belong to? According to Supreme Court of India and the Indian Constitution, this gas belongs to the people of India. Complete surrender of UPA before RIL indicates UPA's inability to run governance in accordance with the Constitution. Drastic reduction in production has forced many gas based power plants in the country to shut down or run at much lower capacity. According to media reports, almost 9000 MW of gas based power plants are lying idle. Today, power from gas based power plant costs around Rs. 3 per KWH. If gas price is increased from $ 4.2 to $ 14.2 as demanded by Reliance, power rates would go upto Rs. 7 per KWH. That's too expensive. At that cost, most of these plants would have to permanently shut down. This is not the first time that a union minister has been eased out at Mukesh Ambani's insistence. In 2006, when RIL had to get its capex increased from $ 2.39 billion dollars to $ 8.8 billion dollars, Mani Shankar Iyer was removed and a more Reliance friendly MurliDeora was brought in. Brief history: RIL got this contract during NDA regime in the year 2000. The contract was meant to favor RIL right from the beginning. In any business, increase in costs means decrease in profits. However, the NDA government , signed a contract dictated by RIL wherein an increase in cost by one rupee meant additional profits of RIL by almost Rs. 2.2. Isn't it strange? A parameter called Investment Multiple has been defined in the contract as under: Investment Multiple (IM) = Total Revenue / Total Investment According to the contract, till IM is below 1.5, RIL takes away more than 80% of profits and government gets less than 20% of profits. It is only when IM becomes more than 2.5 that government gets 85%. This means, RIL has a huge incentive to keep IM below 1.5 by increasing the expenditure artificially. Thus if Reliance were to increase expenditure from 1 Billion to 2 Billion on a revenue of 5 billion, their own net income would go up from 1.6 Billion to 3.5 Billion. This is what the CAG has stated in para 8.1 of its performance Audit of Hydrocarbon PSCs. (extract from executive summary of CAG as annexure 2) In 2004, RIL submitted an Initial Development Plan (IDP) saying they would produce 40 mmscmd for an investment of $ 2.39 billion. All this happened when Ram Naik was the petroleum minister in Vajpayee regime. Within 2 years, RIL submitted another plan saying they would produce 80 mmscmd for an increased investment of $ 8.8 billion. Doesn't that sound strange? To double production, you increase your investment by four times? Having put the initial infrastructure in place, it should have cost lesser to create additional production capacity. Mani Shankar Iyer, who was the then Petroleum minister, would not have allowed this. So, Mani was shunted out of petroleum ministry and Murli Deora, famous to be Reliance man, was brought in January 2006. Despite strong protests by some MPs like Tapan Sen, Deora approved $ 8.8 billion expenditure. By allowing $ 8.8 billion expenditure, in effect, Deora allowed a future revenue of over Rs. 1 lakh crores ($ 20 billion dollars) for RIL. CAG has remarked that there is strong evidence that RIL is gold plating its capital expenditure. Expenditure has been artificially increased (for reasons mentioned above). For instance, RIL is required to place orders for its plant, machinery and other requirements through international competitive bids. CAG alleges that bids were arbitrarily rejected to favor some parties. Just one company namely Aker group got many contracts (see annexure 3, which is an extract from CAG report). Is this group related to RIL? Is RIL siphoning off money through this method? RIL's pressure tactics: RIL signed a contract with NTPC in 2004 to supply gas for its power plants at $ 2.34 per mmBTU for 17 years. It signed a similar contract with RNRL to supply gas at $ 2.34 per mmBTU. However, RIL went back on its word. Under RIL's pressure, EGOM headed by Sh Pranab Mukherjee, revised gas price in September 2007 to $ 4.2 per mmBTU. NTPC and RNRL were forced to accept gas from RIL at revised price. By doing this, Pranab Mukherjee headed EGOM gave an undue benefit of Rs8000 crores to RIL. What is RIL's actual cost of production? Cost of production is much less than $ 2.34 per mmBTU. (Copy of extracts from an SC order Annexure 4).RIL had actually signed long term agreements with NTPC and RNRL for supplying gas at that rate for 17 years. This means that at $2.34 per mmBTU also, RIL was making adequate profits. India is getting gas at $ 0.9 per mmBTU from Oman. Gas rates in Canada are at $ 1.74 per mmBTU. This means that at $ 2.34 per mmBTU also, RIL was making huge profits. RIL sold out nation's resources: Ownership rights of this gas belong to the people of India. RIL is just a contractor hired by GOI to extract gas. Strangely, RIL sold 30% stake in 21 of 29 oil blocks to British Petroleum in July 2011 at $ 7.2 billion. Government gave approval to RIL to do that. How can they do that? It is almost like - I hire a driver to drive my car and that driver sells off my car after a few days. Performance of RIL so far has been much worse than perhaps the worst performing government department. 1. 4 times cost escalation within 2 years from $ 2.39 billion in 2004 to $ 8.8 billion in 2006. 2. Increase in gas price from $ 2.34 per mmBTU in 2004 to $ 4.2 per mmBTU in 2007 to the present demand of $ 14.2 per mmBTU. 3. Capacity created for producing 80 mmscmd after incurring such a huge cost ends up producing just 27 mmscmd after 12 years. 4. 31 oil wells should have been in production till now. Out of them, just 13 are functional. Has any government department fared as badly? If this had happened in any government department, it would have been ripped apart by all government agencies and media. RIL scam akin to coal scam: This scam is on similar lines as Coal block allocation scam. Coal blocks were given away saying that coal production was less in the country and private sector participation would increase coal production. Rather than produce coal, the private parties hoarded coal blocks to sell them at appropriate time in future. In this case also, oil blocks were given away to RIL on the excuse that oil and gas production in the country was less and private sector participation would bring "efficiency". Rather than the production going up, RIL is hoarding the gas. Role of PM: RIL's request for increase in gas prices was turned down by Ministry of Petroleum under Jaipal Reddy and EGOM several times in the last 2 years. EGOM had fixed $ 4.2 per mmBTU price for RIL upto 31.3.2014. When Jaipal Reddy did not budge, RIL approached the PM. PM was very sympathetic to RIL. PM requested Ministry of Petroleum to seek AG's opinion on whether gas prices could be increased midway as demanded by Reliance. It is strange why did the PM not show similar concern when NTPC was forced to accept higher gas price from RIL? Why is the PM not pulling up Reliance for not producing 80 mmscmd gas as per their commitment? Why did the PM not seek legal opinion when country's interests were at stake? Why is PM showing so much interest when RIL interests are at stake? Notice to RIL by Jaipal Reddy: When RIL failed to meet its production targets, Jaipal Reddy decided to disallow their capital expenditure. In the first instance, a notice for disallowance of $ 1 billion expenditure was sent to RIL (Annex 5). This would mean a loss of $2.2 (11,000 Crores) billion to RIL, if we consider IM ratio. Next year, this disallowance could be $ 1.5 billion, which would mean a loss of $ 3.3 billion (16,500 Crores) for RIL. That is the reason why Mukesh Ambani got restless. And that is the reason why Jaipal Reddy was transferred out. Real reasons for price rise in the country: This episode explains the real reasons for price rise in the country. The government seems to be succumbing to illegitimate demands of some powerful corporates in the country (like RIL in this case). Benefits provided to RIL in this case contributed to price rise in power and fertilizer sectors. Similarly, on one hand, government says that they do not have Rs. 35,000 crores to provide LPG subsidy to the people, on the other hand, the government bends backwards to provide benefits to these corporate. Questions: 1. Who is running the government? It appears that telecom companies select their own nominee as Telecom minister and RIL selects its own person as Petroleum minister. 2. So, is this government being run by powerful corporates? 3. Is Dr Manmohan Singh succumbing to corporates under some compulsions or out of ignorance? What are the compulsions, if any? We demand: RIL blackmailing should be immediately stopped. Their KG Basin contract should be cancelled. Government should immediately put in place adequate systems to get full production from KG Basin at cheapest prices for the country. http://www.ndtv.com/article/india/allegations-by-india-against-corruption-against-reliance-industries-limited-full-text-286747 Reliance Industries slips on Arvind KejriwalÃÔ allegations MUMBAI: Shares of Reliance IndustriesBSE -0.63 % were witnessing profit booking as weak hands exited the counter after India Against Corruption activist-turned-politician Arvind Kejriwal alleged that Reliance Industries (RIL) had been "blackmailing" the government to increase the price of gas by "almost stopping" production and indulging in "hoarding like petty traders". He has also alleged that RIL, Chairman, Mukesh Ambani has managed huge favours from both the UPA and NDA governments. At 10:36 a.m.; the stock was at Rs 795.80, down 1.17 per cent on the BSE. It touched a high of Rs 799.05 and a low of Rs 789.10 in trade today. Kejriwal recalled that many years ago, Reliance had agreed to sell gas from the KG-D6 block to NTPCBSE 0.21 % for 17 years at a price of $2.5 per unit. "However, within two years, Reliance said it wanted to revise the rate to $4.25 per unit in 2007, which then finance minister Pranab Mukherjee agreed to as the head of an empowered group of ministers. Now, the company wants the rate to be further hiked to $14.25 per unit. What is the logic?" he asked. He added that petroleum ministers Mani Shankar Iyer and Jaipal Reddy were removed from the oil ministry for making things difficult for RIL. "Jaipal Reddy was removed as he refused to hike the charges being levied by Reliance Industries to supply gas to NTPC," Kejriwal said. Meanwhile, Mani Shankar Aiyar denied this was the case. He said he had met Mukesh Ambani only a couple of times during his tenure. In response to the allegations, RILBSE -0.63 % said the charges were "devoid of any truth or substance whatsoever and are denied". "Irresponsible allegations made by IAC at the behest of vested interests without basic understanding of the complexities of a project of this nature do not merit a response," the reply said. RIL has said that it has implemented a world-class project at KG-D6 basin and the project has been recognised by the industry as top class and made the country proud. http://economictimes.indiatimes.com/markets/stocks/stocks-in-news/reliance-industries-slips-on-arvind-kejriwals-allegations/articleshow/17043958.cms [ame=http://www.youtube.com/watch?v=8mO_Uncu28Y]Kejriwal lashes out at PM, Pranab - NewsX - YouTube[/ame]
Swing_n_Speed Posted November 1, 2012 Posted November 1, 2012 LMAO at the 0 comments here. Someone should have put Gandhi somewhere in teh title, teh comments would then keep flooding in.
Sachin=GOD Posted November 1, 2012 Posted November 1, 2012 As usual, a lot of hot air but not much substance from Kejriwal.
rkt.india Posted November 2, 2012 Author Posted November 2, 2012 As usual' date=' a lot of hot air but not much substance from Kejriwal.[/quote'] What substance do you want? All prima facie substances are there.
rkt.india Posted November 2, 2012 Author Posted November 2, 2012 For me this is one the biggest scam, looting the natural resources of the country for huge profit earning and harming the interest of the people.
Crookbond Posted November 2, 2012 Posted November 2, 2012 What substance do you want? All prima facie substances are there. The new way to dodge reality - legal loopholes.
Clarke Posted November 2, 2012 Posted November 2, 2012 I'm not sure if anyone isn't aware of the fact that Reliance Industries has considerable influence on the running of the country.
rkt.india Posted November 2, 2012 Author Posted November 2, 2012 The new way to dodge reality - legal loopholes. happenings in Wadra case is a perfect example of that. If people cannot see the evidence how reliance was being profitted by gvt. in this KGB gas allocation furore then for them even Kasab must not have attacked Mumbai. These politicians are harming our country more than the outside extremists. Reliance is assured is of profit of 22 rupees for investment of 10 rupees. What extremes of profits and that is when they are not the owner of KGB, just contractors.
CG Posted November 2, 2012 Posted November 2, 2012 happenings in Wadra case is a perfect example of that. If people cannot see the evidence how reliance was being profitted by gvt. in this KGB gas allocation furore then for them even Kasab must not have attacked Mumbai. These politicians are harming our country more than the outside extremists. Reliance is assured is of profit of 22 rupees for investment of 10 rupees. What extremes of profits and that is when they are not the owner of KGB' date=' just contractors.[/quote'] And Reliance says suddenly the gas production has dropped and gas deposit estimates were wrong.They are waiting for price rise to increase production and benefit .
rkt.india Posted November 2, 2012 Author Posted November 2, 2012 And Reliance says suddenly the gas production has dropped and gas deposit estimates were wrong.They are waiting for price rise to increase production and benefit . and they were imposed the fine of 7000 crores by Petroelum MInister Jaipal Reddy for reduction is production and soon after that he is shfated out of the ministry. CAG also refused to come to the meeting rergarding Reliance production and performance auditing because they found that the meeting agenda was favoring Reliance.
achilles Posted November 2, 2012 Posted November 2, 2012 Kejriwal is stating the obvious. It speaks a lot about our country that it took so long for us to bring this out in the open.
Anonymous Posted November 2, 2012 Posted November 2, 2012 An open secret. To all those fanboys who idolise Dhirubai, he was no angel either. IMO, Tatas, Narayanamurthy and probably Azim Premji are the only ones with an iota of integrity
BeautifulGame Posted November 2, 2012 Posted November 2, 2012 An open secret. To all those fanboys who idolise Dhirubai, he was no angel either. IMO, Tatas, Narayanamurthy and probably Azim Premji are the only ones with an iota of integrity U never heard of Nira Radia tapes? :cantstop:
Anonymous Posted November 2, 2012 Posted November 2, 2012 U never heard of Nira Radia tapes? :cantstop: Thats called lobbying and Ratan Tata might not even be privy to Nira Radia's murky dealings. Just my opnion, that man has done a lot for the country and his group is well known for funding charities rather than pay hefty dividends or bonuses. I do not really see any need for him to steep to that level. Just my personal opnion and I have met the man once personally when he came to my university ( not that he shared his thoughts with me personally)
BeautifulGame Posted November 2, 2012 Posted November 2, 2012 Thats called lobbying and Ratan Tata might not even be privy to Nira Radia's murky dealings. Just my opnion' date=' that man has done a lot for the country and his group is well known for funding charities rather than pay hefty dividends or bonuses. I do not really see any need for him to steep to that level. Just my personal opnion and I have met the man once personally when he came to my university ( not that he shared his thoughts with me personally)[/quote'] You are exactly using the excuses that few others are using for Ambanis and co.Yep u lbby sommeone for a ministerial post without any benifit to u.Makes sense. And even Ambanis to lot of charity too.
Anonymous Posted November 2, 2012 Posted November 2, 2012 You are exactly using the excuses that few others are using for Ambanis and co.Yep u lbby sommeone for a ministerial post without any benifit to u.Makes sense. And even Ambanis to lot of charity too. Every Tom who is somebody in the corporate world does lobbying, it even happens in the US house of representatives. Shameless looting is another matter altogether, which Ambanis are adept at. So lets not mix them together. Do you think that the Tatas are so inept that with their history and near monopoly in various industries none of their scions could not have been the wealthiest Indians alive? Mukesh Ambani on the other hand loots and builds the world's expensive home. Again, to each his own, I am not gonna get paid for defending the Tatas here.
achilles Posted November 2, 2012 Posted November 2, 2012 An open secret. To all those fanboys who idolise Dhirubai, he was no angel either. IMO, Tatas, Narayanamurthy and probably Azim Premji are the only ones with an iota of integrity He is getting such a hard time from the govt of-late, its not even funny. His mistake- Publicly questioning the logjam in decision making.
Clarke Posted November 2, 2012 Posted November 2, 2012 U never heard of Nira Radia tapes? :cantstop: I have had personal experiences while working for one of the corporations mentioned here and dealing with the other as a competitor in the telecom industry. There were instances when their Indicom group went out of their way to comply with existing rules & regulations even if that meant excessive delays & expenses. I wish i could say the same for the other(s). My understanding is the Tata group is among the larger corporations that have some sense of ethics but that does not mean they will shut shop while their competitors use all possible tactics to increase their market share. Its fair if you call this as an excuse, they're not perfect but they're far far ahead of RIL on ethics.
urbestfriend Posted February 11, 2014 Posted February 11, 2014 As usual' date=' a lot of hot air but not much substance from Kejriwal.[/quote'] So now he orders an inquiry, you talk about his jurisdiction :cantstop: How time changes:--D
jalebi_bhai Posted February 11, 2014 Posted February 11, 2014 While this is hardly a secret, it's nice to see the fine details come out........next step from here?
Recommended Posts