Threat to cancel Adani CGD-IX licences by PNGRB

Vol 23, PW 5 (16 Jan 20) People & Policy
     

Adani Gas (AGL) stands accused of "fraud" by the PNGRB for failing to disclose an ongoing corporate re-structure during CGD-IX where it walked away with 13 areas.

This report learns PNGRB secretary Vandana Sharma sent a strongly worded five-page letter to Adani chief Suresh Manglani on November 29 (2019) demanding answers by December 9 (2019) on why its CGD-IX licences should not be cancelled; why it should not pay a penalty of Rs396.82cr ($55m or equivalent to the total bid bonds and bank guarantees for 13 areas) and why other CGD-IX bidders or the "general public" should not take action against AGL "for perpetrating a fraud." Under scrutiny is why AGL didn't tell the PNGRB it was in the midst of a corporate restructuring exercise ("Composite Scheme of Amalgamation and Demerger involving Adani Gas Holdings, Adani Gas and Adani Enterprises") driven by the National Company Law Tribunal (NCLT) in 2018 during CGD-IX.

Sharma claims AGL "never disclosed" in its bids that it was poised to change its promoter from Adani Enterprises to two "discretionary (Adani) family trusts". She alleges AGL’s bids "asserted that Adani Enterprises is not only the promoter but also the ultimate holding company of AGL" and no other disclosure of corporate reorganisation or "an imminent change in the promoter and ultimate holding company was made by AGL."

Crucially, said Sharma, AGL used the net worth of Adani Enterprises to meet the net worth criteria for CGD-IX areas.