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May 28, 2010

Press Note Date : 28/05/2010 ENG

Click here to Download Press Note 28/05/2010 GUJ & ENG REG GSPC IPO with all relevant Documents

PRESS NOTE                                                              Date : 28/05/2010

 

GSPC’s dubious deal with GeoGlobal smacks of several objectionable premises. Recent disclosures by AMEX listed GeoGlobal to American Regulators substantiate our earlier allegation of serious differences cropping between GeoGlobal and GSPC. The latest figures reveal GeoGlobal owes Rs 1250 cr to GSPC as on May 19 2010. GSPC which is now anytime coming out with an IPO to mop up Rs 3500 crore from the Public to fund its ambitious Deen Dayal Block developmental projects is in the dock as to why is it unabashedly patronizing a defaulter partner GeoGlobal which is repeatedly refusing to pay the legitimate dues of Gujarat Government’s GSPC.

 

  1. 1.     GeoGlobal Resources(India) was formed by Jean Paul Roy in Calgary, Canada to participate with GSPC for the joint bidding for the KG basin offshore block. In March 2002, GSPC inked a Carried Interest Agreement  (CIA)with GeoGlobal under which GSPC has to put up all funds required for the operations in the KG offshore block including the share of GeoGlobal and all this entirely at the risk of GSPC.  Geoglobal was deemed eligible for all benefits and profits accrued without sharing the risks.
  2. 2.     GeoGlobal was assigned a 10 per cent stake. GeoGlobal was inducted “secretly” without following transparent procedure and contrary to established principles.
  3. 3.     At the time of offering 10 per cent stake in KG basin block by GSPC to GeoGlobal, capital stock of GeoGlobal stood at a meager 64 US dollars which even conservatively speaking would not exceed Rs 3000.
  4. 4.     GeoGlobal contends under CIA, it has no obligation to invest any money towards exploration or development of the KG basin offshore block for which production sharing contract was entered into between GSPC and GeoGlobal. According to GeoGlobal exploration and development of KG basin block is to be done as per the agreement at complete risk and cost of GSPC and if they succeed, GeoGLobal would walk away with a handsome stake of 10 per cent in the commercial proceeds but in the eventuality of  GSPC not striking gas and the efforts proving worthless, GeoGlobal would not pay anything to GSPC. In short, the production sharing contract(PSC) only guarantees GeoGlobal benefits arising from financial risk undertaken by GSPC and no obligations on part of GeoGlobal.
  5. 5.     The business association of GSPC with GeoGlobal is thus a calculated ploy to grossly benefit a non entity at the cost of the tax payers and citizens of Gujarat, in this case, the non entity is Canada based GeoGlobal.
  6. 6.     Available evidence clearly indicate  enormous benefits e been doled out to GeoGlobal for absolutely no reason or value contribution received or acknowledged by GSPC including no risk undertaken by GeoGlobal.
  7. 7.     This heinous deal shaped in 2002 has been executed at the hands of those who claim that their hands are the cleanest. The Chief Architect of this Multimillion fraud has the dubious distinction of being  India‘s longest serving bureaucrat in the same position with connivance of his higher ups in the Chief Minister’s Office. And all this with political blessings at the behest of those who claim to be the Guardians of 5.5 crore Gujaratis and his subordinates.
  8. 8.     Under the “vision” of the same bureaucrat, GSPC once again chose yet another non entity SWAN ENERGY , again without following established principles, and sold out Pipavav Power Projects, carbon credit accruals worth over Rs 14000 crore in a throwaway Rs 381 crore.  We sought clarification and White paper both on GeoGlobal and Swan Energy on the floor of the Gujarat Assembly during the Budget Session. Details are still awaited

For the sake of Gujarat‘s 5.5 crore Gujaratis, those responsible need to answer

  1. 1.     Why and how did a South American of capital less than what is required for opening a paan shop become the partner of a blue chip State enterprise in Gujarat?
  2. 2.     How did an agreement come to be executed which puts absolutely no obligation on the partner (GeoGlobal) but passes on all the potential benefits while leaving all financial risk to GSPC?
  3. 3.     Who were the dark horses operating behind the murky GSPC GeoGlobal deal and pulling the strings clandestinely?
  4. 4.     What was the role played by the Board of Directors of Government owned GSPC in this shady deal?
  5. 5.     For what personal benefits were the interests of GSPC compromised by those who conceptualized and executed this dark deal.
  6. 6.     No surprise why the copy of GSPC- GeoGlobal agreement is being consistently denied under the RTI. Because the relationship between GSPC and the entity in question is a massive fraud perpetuated on the people of Gujarat by a corrupt clique of politicians and officials who are determined that no details of this deal ever becomes public.
  7. 7.     Those whose role demand scrutiny in this deal include: Chief Minister Narendra Modi, Minister of State for Energy Shri Saurabh Dalal, principal secretary to Chief Minister K Kailasnathan, Principal Secretary Energy and petrochemicals D J Pandian, former Chief Secretary and GSPC chairman D Rajgopalan, GSPC’s General Manager(Planning and development) M Y Farooqui. Onus lies on current incumbent Tapan Ray to expose those involved in the fraud in true spirit of Indian Administrative Service instead of dancing to the tune of DJ Pandian.

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