How Essar Has Been Accessing Sensitive Government Documents That Impact Its Businesses

04 June 2015

On 27 February this year, the Indian Express broke a story that revealed how the Essar Group—an Indian conglomerate that has investments in sectors such as steel, infrastructure and energy—provided favours to journalists, politicians and bureaucrats. The information was based on the internal communication of the company, which had been leaked by a whistleblower from Essar. Soon after the story was published, Essar put out a series of tweets on its official twitter account to counter the allegations that were made in the report. In one, it said, “Essar follows a zero tolerance policy towards acts which are against the law of the land” ending it with the hashtag “#EssarTruths.” The group, and its Twitter feed, had been conveniently silent when a week earlier one of its deputy managers had been arrested, along with officials from four other corporate groups, with regard to leaks from the petroleum ministry.

The series of tweets on the company’s Twitter feed also included the following: “We are advised infrmtn [information] & data on prvt [private] corporate computers enjoy same protection of law as infrmtn stolen from Gvrmnt [Government] computers #EssarTruths.” However, it appears now that Essar’s concern about the privacy of its internal documents does not extend to sensitive documents—that could directly or indirectly affect the company’s various businesses—belonging to the government. Although the petroleum leaks in February 2015 resulted in the arrest of only one mid-level executive from Essar, a new set of emails that have been released by the whistleblower reveal that no matter who gained access to those documents, they were exchanged among the top officers of the company. In fact, the process that was set in place by the company to access government documents appears to be so sophisticated that Essar seemed to be able to get specific documents pertaining to matters that could affect or benefit its business decisions at will.

Ashish Rajgarhia, working with the “Chairman’s Secretariat,” the office of Shashi Ruia who is the chairman and co-founder of the Essar Group, sent out to two emails on 7 November 2013 to his colleagues from across the corporate group. The subject for both these emails read:“Recd [Received] from Media Sources.” One contained an internal note by the then oil minister, Veerappa Moily, dated 17 October 2013, and the other had a note dated 28 October 2013 that Giridhar Aramane, the joint secretary of exploration in petroleum ministry, had sent to the Cabinet Committee for Economic Affairs [CCEA]. Both these notes were about the Ratna R Series oil fields in Maharashtra, that had been awarded to Essar in 1996. The production-sharing contract (PSC) for the fields was in danger of being annulled in 2013, due to several issues including conflicts over the net worth of Essar, and the amount of cess and royalty to be paid.

In his note, Moily wrote that the case was a “classic example of system failure. He continued “There could be some delay on account of the contractor but chronology of the events reveals that the blame largely lies with the Government system.” He then went on to state,  “Though it may be convenient for us to cancel the LOI [Letter of Intent] issued to the contractor and resort to fresh bidding, we should also be aware of the legal implications and the likely impact of such decisions to investor’s sentiments.” As Moily noted in the letter, the law ministry’s opinion had been sought by the finance ministry regarding the issue in August, but he disregarded that. “However, I agree with the proposal that at this stage rather than seeking a clarification from the Ministry of Law and Justice, it is appropriate to place the matter before the CCEA with detailed analysis of all the available options which also include the finalization of the contract with Essar.”

Krishn Kaushik  was formerly a staff writer at The Caravan.