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

By KRISHN KAUSHIK | 4 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.”

(On 28 October 2013, the Economic Times published a story based on Moily’s note, quoting some parts of it. But it did not publish the entire note.)

These are but two such emails among several more from the set that was released, which demonstrate the company’s penetration within the highest echelons of the executive and the bureaucracy in India.

The last set of emails released by the whistleblower had pointed out that officials from Essar were in contact with Moily and his staff. In an email that was sent on 12 July 2013, a director of corporate affairs, Sunil Bajaj sent an email to Rajgarhia that stated that Moily’s private secretary had asked for his nephew to be employed with the Essar group. In August, Bajaj wrote to Rajgarhia and Prashant Ruia, the chief executive officer of the Essar Group, informing them that at his last meeting with Moily, the minister had given him a letter “from a person in his constituency for cancellation of lease deed agreement for Essar Petrol Pump. The person concerned is very influential keeping the vote politics in view, therefore, he insisted his work should be done immediately.”

In a similar vein, Shivnath Thukral, a president with the Essar Group, sent an email to two top executives from Essar Oil and to Bajaj that had no text in the body. The subject read, “am sure you already have it but someone sent it to me.” Attached in the email, sent on 21 January 2012—more than five weeks before the national budget was tabled in Parliament—were the “Petro Proposals for Budget.” The attachment that he had sent carried 19 pages of budget proposals for the year 2012–13 and had been sent by the ministry of petroleum and natural gas to the finance ministry on 6 January. The nonchalance with which Thukral emailed some of the most economically sensitive national documents to his colleagues is stark. I asked Paranjoy Guha Thakurta, a senior business journalist, about the implication of Essar gaining such papers before they were supposed to be released. Guha Thakurta responded by saying that if what I was saying was correct, then such confidential information could be used by these corporate groups for more focused lobbying. He told me that, “They can try and put pressure” on various ministries to not accept any proposal that could be detrimental to their interests, or push those points that would benefit them. “These documents are not meant to be in the public domain,” he added.

However, the influence of the executives of this group does not seem to be restricted to just the petroleum and finance ministries. They also had access to documents from the coal ministry. In March 2012, Sanjeev Anand, a joint general manager with Essar Services India Limited (ESIL) sent out an email that was also marked to Prashant Ruia and his brother Anshuman—the president of Essar Power Limited—among others. The email opened with, “Ministry of Coal had constituted a committee to identify and earmark coal blocks for allocation for captive end use as well as Government dispensation. After various meetings, committee has finally earmarked 54 coal blocks for Power, Steel, Cement, Sponge Iron and Surface Coal Gasification.” The list and details of each of these blocks were attached with the email. Anand also elaborated upon the future course of action for these blocks, and the procedure for how each one of these would come up for alienation later and when applications would be invited. This kind of information, Guha Thakurta said, “provides them a business edge.”

In another example, Ravish Malhotra, an advisor with Essar Bulk Terminal Limited, emailed Bajaj and Rajamani Krishnamurti, a senior vice president with ESIL on 16 November 2012. He had attached “some extracts” of a “draft captive” policy that had been forwarded to the Ministry of Commerce, Department of Economic Affairs and the Planning Commission for comments the previous day. Malhotra mentioned that he was “trying to get the full copy of the draft.” From this and other emails by Malhotra, it was evident that he had immense access and influence in the shipping ministry. In an email sent on 5 June 2013, he wrote, regarding a file that his seniors felt were important, that he had been “closely monitoring the file in the Ministry with JS (P) and Director.” The file he said had not been traceable the previous week, but he had “put some Ministry staff on the job to trace the file monitoring on daily basis.” The email ended with, “Meantime have requested Director Mr. Naik to start-build-up alternate file…”

It appears from these and previously released emails, most of which are from 2012 and 2013, that the group’s executives appeared  to enjoy uninhibited access in the ministries including, but probably not restricted to, finance, coal, petroleum, environment, steel, railways and shipping, all of which have direct impact on the multiple industries that Essar has a prominent presence in. The audacity of some of these emails, wherein senior executives from the company demand that its officers acquire copies of sensitive government documents, betrays a sense of entitlement. Requests for documents, drafts and copies either flowed from the top or were pre-empted, as mid-level executives appeared to send whatever documents they were able to access and could potentially be relevant, to their bosses. A former petroleum secretary told me that any leak is “undesirable” for any government, irrespective of its contents.

On 22 February 2013, Prashant Ruia sent an email to Bajaj in which he suggested re-introducing the concept of “Flash Reports”—“a brief summary consisting of synopsis of your key meetings during the day, key activities of the company, and more importantly concerns that would require our action and attention.” Bajaj responded by saying, “I suggest to create a separate id for all PD’s because I do carry a lot of classified and confidential information during my interaction with various key people about several activities happening in and around.”

On Monday, I sent a questionnaire to an Essar spokesperson, asking how the group’s officers had access to these secret and sensitive government documents, and why those documents were being accessed by the company. The spokesperson responded over email saying, “The subject matter of mails under reference is an ongoing case in the Court. The matter is sub judice. Essar would once again like to reiterate that the documents being quoted were already in the public domain and it has not indulged in any illegal or improper act. Hence your inference that Essar Officials’ had access to the confidential documents of the Government is wrong. The emails even if true do not disclose commission of any wrong doing.”

However, several documents attached in the emails including the budget proposals and Moily’s and Aramane’s notes were not in the public domain. Even in instances where a newspaper had quoted from the ministry’s internal communication, it did not make the documents publicly available.

Additionally, the group did not seem to wield influence over just the union government. It also appeared to move within states with a similar nimbleness. Bajaj noted in an email in September 2012, “The importance of regional parties are likely to gain the momentum in time to come.” There are mentions of bureaucrats and ministers with whom company officials were in touch with from Gujarat, Uttar Pradesh, Andhra Pradesh, Chhattisgarh and Orissa. Perhaps, it is safe to assume that we have not seen the end of #EssarTruths yet. 

 

 

 

 

 

 

 

Krishn Kaushik is a staff writer at The Caravan.

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