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Mukesh Ambani vs Modi : real or drama ?

Mumbai, July 16 (): Mukesh Ambani-owned RIL (Reliance Industries Ltd) and the Narendra Modi government are falling out is the buzz in industry circles but yet another section feels that both are just buying time.

The first doubt over Mukesh Ambani and Modi not being on the same page was to delay the gas price hike as UPA had left the decision to the next government. AAP had made the gas price an election issue alleging that Modi and Mukesh Ambani were hand-in-glove, as the latter was funding BJP’s election campaign. That allegation sounded true as the Ambanis were the biggest supporters of Modi. Even till date there has been no decision.

Mukesh Ambani too postponed further investments in R-cluster at KG-D6 Block. Yet another reason is that the CAG report on 2G had stated that RIL had manipulated conditions in its favour to bag the 4G contract, which it used to launder money.

AAP top brass and Supreme Court lawyer Prashant Bhushan had filed a petition for the cancellation of RIL’s 4G deal. The AAP lawyer sent a copy of the petition to SIT formed by Modi to bring back black money, alleging that Mukesh Ambani used the 4G contract route to turn black money from KG Basin via Singapore and deposited into his company accounts abroad.

Bhushan quoted two CAG reports that accounts were fudged to show more capital expenditure and sales vouchers were over-invoiced. As far as SIT is concerned, it has to probe RIL over this.

The third reason is SAT (Securities Appellate Tribunal) decision that goes against RIL in its case against stock market regulator Sebi, which has charged RIL of insider trading. The charge levelled in 2007 finally got SAT to back Sebi and FM was nowhere on the scene. This could put RIL behind by several crores.

Finally,the government has imposed a $579 million penalty for shortfall in gas production in KG basin. Yet another shocking move was Oil ministry asking PSU’s CPCL and GAIL to deposit the payments to the treasury instead of RIL account as the company owes the government a share of the profits from KG basin.

A total of $115 million is expected to go to the government. Analysts say RIL and other companies operating in KG basin have taken the arbitration route over gas price hike and will win while Modi will be seen as politically correct. Oil ministry has put before the cabinet a note that the gas shortfall in the past four years should be met by Mukesh Ambani’s RIL and till then the price should not be hiked.