Wednesday, October 26, 2011

CAG says scam at ONGC, NTPC cost govt Rs 1800cr

CAG says scam at ONGC, NTPC cost govt Rs 1800cr

The Comptroller and Auditor General’s (CAG) audit of public-sector companies has revealed financial irregularities in bluechips like ONGC, IOC and NTPC. As a result of these irregularities, the government has lost a possible dividend inflow of more than Rs 1,800 crore. CNBC-TV18’s Abhijit Neogy reports.

Here is a verbatim transcript of Abhijit Neogy’s comments on CNBC-TV18. Also watch the accompanying video.

The annual CAG report for PSU companies is out and it says bluechips like NTPC, ONGC etc have indulged in financial irregularities. The irregularities range from overstatement of profits to overstatement of expenditure and that has resulted in a loss of about Rs 1,846 crore in dividend to the government. As far as ONGC is concerned, the understatement of profits through overstatement of expenditure is around Rs 257 crore. For IOC, it amounts to about Rs 207 crore and NTPC has inflated its balance sheet by about Rs 938 crore.

The frequent flyer programme of National Aviation Company Ltd. has also come in for some criticism from the IT audit of CAG. This particular mechanism doesn’t seem to be yielding much on the ground because the Action Taken Report, because last year, about 75% of recommendation of penal action has not taken off.

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