Securities and Exchange Board of India has asked the petroleum ministry to put in place a warning system to alert investors of any premature declaration or non-disclosure of an oil and gas discovery by a company.
Taking director general of hydrocarbons V K Sibal to task for seeking action against Oil and Natural Gas Corporation for alleged non-disclosure of a gas find, the capital market regulator said there was no mechanism to determine if any announcement was premature or did not confirm to the disclosure clause.
"It would be useful if the DGH or the ministry puts in place a mechanism by which Sebi is alerted whenever there is a premature disclosure or a non-disclosure of development that merits disclosure," Sebi chairman M Damadoran wrote to petroleum secretary S C Tripathi on September 6.
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Damadoran said Sibal had on September 6 stated that Sebi should take action against state-owned ONGC for non-disclosure of a reported 6 trillion cubic feet gas find.
"We have not received any communication from the DGH either on earlier occasion or on this occasion. If the DGH is of the view that an act or omission has taken place meriting Sebi's attention, it would be appropriate for him to write to Sebi rather than to have Sebi learn of his views through television channels," Damadoran wrote.
"Sebi is not in a position to decide whether an announcement of a gas find is premature or whether there is any development relating to a gas find that ought to have been reported," he said.
Damodaran wrote that "no communication whatsoever has been received from DG, DGH regarding any development that merits action by Sebi".
ONGC chairman Subir Raha too had rubbished Sibal's allegation saying the company complied with all rules and procedures laid down for making public any oil and gas find.
"Since DGH is yet to prescribe norms for making an announcement, we have voluntarily adopted the US regulatory norms for announcing discoveries and we are totally complying with them," he had said.
Stating that the company had not made any announcement of finding 6 TCF of gas reserves in a Krishna Godavari basin block in Bay of Bengal, Raha said ONGC as a practice made announcements of oil and gas discovery only after proper testing of reserves and communicating the results to the government.
Petroleum Minister Mani Shankar Aiyar had also severely criticised Sibal for airing his differences with Raha publicly and making personal allegations.
