L&T commission to Enerflo for Cairn pipeline

Vol 13, PW 21 (08 Apr 10) People & Policy
     

Larsen & Toubro can rest assured that the commission it paid its agent to secure a prestigious contract to lay Cairn India’s crude evacuation pipeline from Barmer to Salaya has been put to good use! On January 6 this year the Toronto Stock Exchange announced that Enerflo Singapore Pte.

Ltd, owned by former Cairn general manager corporate affairs Subra V. Subramaniam and his wife Meera, had acquired 12.01% of shale gas explorer Stealth Ventures for $1.05m through a private placement.

Curiously enough, that’s roughly equivalent to the ‘service fees’ L&T paid to Enerflo after it announced that it had won the “multi-million” dollar Cairn pipeline contract, “against stiff competition” on February 21, 2008. More than a year later on June 30, 2009, L&T instructed IDBI Bank in Chennai to transfer $462,559 to Enerflo’s bank account in Singapore, adding that $970,196 has already been paid, according to a letter seen by this report.

Why a blue-chip company like L&T would need an agent to secure this Cairn contract is unclear. What is clear beyond doubt is that L&T signed a three-year Memorandum of Agreement (MoA) with Enerflo “effective” January 1, 2007.

The contract clearly states: “Enerflo would be the exclusive representative of L&T for all of L&T’s activities connected with the said (Cairn pipeline) project,” and that: “L&T shall pay Enerflo as service fees 3% on the invoice value raised by L&T to Cairn exclusive of taxes.” When contacted by this report to ask if L&T had extended its MoA with Enerflo beyond January 1 this year, vice president M.

Ram Kumar said: “Can I get back to you on that” Asked to confirm that the L&T agreement with Enerflo is genuine, Ram Kumar hesitated before adding: “I’ll have to check.” Kumar’s signature figures prominently on a letter he sent on February 18 last year agreeing a request by Meera Subramaniam for Barbados-incorporated Enerflo Inc to transfer its “rights and obligations” to Enerflo Singapore Pte.