Cairn launches probe into $49m CPF contract

Vol 19, PW 17 (05 May 16) People & Policy

Cairn India has launched an internal inquiry into the alleged payment of Rs15 lakh ($25,000) in cash to facilitate the award of a $49.6m contract at Rajasthan block RJ-ON-90/1.

Under the spotlight is the EPC contract for a Central Polymer Facility (CPF) commissioned in April 2015 designed to support Cairn's Enhanced Oil Recovery (EOR) programme at the Mangala oilfield which has resulted in an additional 13,000 b/d production. In a detailed e-mail sent to among others, the Enforcement Directorate, CAG, the DGH and ONGC's internal vigilance department, Cairn faces allegations from an anonymous whistle-blower that it breached its tender guidelines by awarding the multi-million dollar contract to novice Indian company IETS Ltd on July 25, 2014 - hardly two months after IETS was incorporated.

Among the several [printable] accusations faced by BSE-listed Cairn is that it by-passed a Reserve Bank of India (RBI) ban on L1 Chinese bidder Daqing Construction from setting up an India project office by depositing the money into the account of IETS - its Indian affiliate. Incorporated on June 6, 2014 as the "subsidiary of a foreign company," IETS India Pvt Ltd lists its area of activity as "legal, accounting, book-keeping, tax consultancy, market research, public opinion polling and management consultancy." Of the company's four directors one is Indian, Surinder Kumar Dhawan, the others are Chinese-sounding nationals Chen Chen, Fengwu Wu and Yanming Gao, according to publicly available records.

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