Gujarat's Panama Papers? State-owned GSPC 'had links with controversial cos'

Subir Ghosh

In a new book, Subir Ghosh, Bangalore-based journalist, researcher and writer, quoting an ex-Government of India bureaucrat, has alleged that the former bluechip state public sector undertaking (PSU) Gujarat State Petroleum Corporation (GSPC) has had links with a company that was associated with dubious business concerns mentioned in the infamous Panama Papers.

Titled “Grand Illusion: The GSPC Disaster and the Gujarat Model”, the book’s writer is a co-author of the controversial “Gas Wars: Crony Capitalism and the Ambanis”, which has invited Rs 100 crore defamation suit from the Reliance Industries Ltd (RIL). The book was released in Ahmedabad on Thursday.

Published by Paranjoy Guha Thakurta, another co-author of “Gas Wars”, the book quotes former economic affairs secretary EAS Sarma as writing to the Enforcement Directorate (ED) “bringing in the Panama Papers angle”, says Ghosh, after the ED did not respond to an earlier plea to investigate into GSPC’s alliance with a private company, of which a former Gujarat minister known to be close to Prime Minister Narendra Modi was a “beneficiary.”

Sarma is quoted as saying, “I find more distressing facts about the Gujarat Natural Resources Ltd (GNRL). It was operating through six subsidiaries which include Heramec, Gorlas, Sigma Oil & Gas & Alkor Petro and Overseas.”
The book says, the GNRL, contrary to its misleading name, is a private limited company and not a state enterprise. Saurabh Patel, a former minister overseeing GSPC, was a “beneficiary investor in GNRL.” Patel, fighting Gujarat state assembly polls from Vadodara and a BJP chief ministerial aspirant, was mysteriously removed as state energy minister after Vijay Rupani took over the state’s reins of power last year.

Book further quotes Sarma as saying, “Both Heramec and Gorlas figure on the website of International Consortium of Investigative Journalists (ICIJ) and Panama Papers, as evident from the enclosed snapshot pictures of that website.” The book, however, does not provide the “enclosed shapshots”.
Sarma continued, “It is surprising that the Ministry of Petroleum and Natural Gas (MoPNG) should assign eight oil blocks to [the] GSPC knowing well that Heramec is a 30% partner in Kanawara, North Kathana, Allora, Unawa, North Balol and a partner with Oil and Natural Gas Commission (ONGC) in CB-ONN-2004/1, CB-ONN-2004/4 (see pages 71 and 72 of the enclosed GNRL annual report for 2015–16).”
Sarma underlined, “Assignment of such a large number of hydrocarbon blocks to GSPC/GNRL consortium was in itself highly questionable. [The] MoPNG should be asked to explain the circumstances that compelled it to allot these blocks to the Gujarat consortium.”
He added, “In turn, it is distressing as to how [the] GSPC, a state PSU, under the administrative control of Saurabh Patel, the minister, joined hands with such a highly questionable company, namely GNRL, and its subsidiaries and exposed itself to an enormous risk, which in turn got indirectly transmitted to MoPNG, knowing well that GNRL was only a family concern of the minister.”
The accusation comes amidst indications emerging that GSPC, which has reportedly gone bankrupt, is being bailed out by a Central PSU, the largest oil and gas producer, Oil and Natural Gas Corporation (ONGC), which has completed a Rs 7,738 crore acquisition of 80% stake in GSPC.
An earlier letter by Sarma to ED had said, “The annual report of GNRL shows how GSPC had allowed that company to have a share in several oil blocks it won in competitive bidding. GNRL was partly owned by Saurabh Patel, the minister in charge of the department in Gujarat.”
Sarma had added, “These findings raise very serious concerns about the way Saurabh Patel had a free hand in the then Modi government of Gujarat and how valuable oil blocks that belong to the people of India were bartered away to foreign nationals of questionable credentials.”