<p>In its reply to the ill-famed Comptroller and Audit General (CAG) audit report to the oil ministry, Reliance Industries Limited (RIL), a Mukesh Ambani owned conglomerate, has stated corporate rivalry as one significant factor that insinuated CAG to red mark RIL’s cost expenditure and put KG D6 basin under scanner in its audit report.</p>
<p>RIL has stated, in its reply to the ministry, that “corporate rivalry motivated a few people with vested interests to indulge in a vicious smear campaigning”, slyly leading CAG to charge RIL with allegation of inflating capital expenditures on its oil and gas acreage. RIL has made significant progress in its most prolific oil and gas basin of Krishna – Godavari (KG D6) region, and this has notably been commended for its time-honored and cost effective function. Yet, certain corporate entities have engaged in defamatory actions, on a public scale, to reflect baseless suggestions against RIL’s cost expenditure; as affirmed in RIL reply report.</p>
<p>Also, RIL has acquitted that CAG does have the mandate to question the ‘performance’ or ‘reasonableness’ of cost incurred by the operator in its functions, as it should be concerned with evaluating primarily the authenticity of expenses. Although CAG representatives spent many long man hours at Reliance offices during the audit period, they failed to rationalize their claim of ‘undue benefits’ RIL suggestively received from oil ministry in their audit report. On reviewing this draft, RIL has noted that CAG must restrain its function to audit of financial accounts and related documents and check a process’ adherence to government and management committee mandate and not ‘become’ a directing body in the process.</p>
<p>Despite corporate rivalry now taking precedence in this spate of accusations, RIL believes that CAG, in the least, should have paid heed to the basic cost recovery provisions. When an operator incurs increased cost it does not imply presence of ‘undue benefits’ to that operator but it is rather when the operator incurs low capital expenditure that the profits increase.</p>