Goldman Sachs raises corporate governance issues with ONGC

NEW DELHI: Investment banker Goldman Sachs on Thursday raised corporate governance issues with Oil and Natural Gas Corp (ONGC), saying the government took $20 billion in cash over the past six years from the company without consulting minority shareholders.

"Since 2003-04, the promoter (Government, which owns a 74 per cent stake) has taken away cash from the company on a quarterly basis for subsidising loss-making state-owned downstream companies. So far ONGC's promoters have taken cash of almost USD 20 billion from the company without consulting the minority shareholders," Goldman said in its latest report.

ONGC gives discounts on crude oil it sells to state-owned refiners to partly make up for the losses they incur on selling fuel below cost.

Company's Chairman and Managing Director R S Sharma denied compromising on corporate governance. "We give corporate governance utmost importance. At no point has ONGC compromised on corporate governance issues."

He said the decision to give out subsidy on fuel are taken after deliberation at board and Government was justified in asking for such discounts as unlike global peers, ONGC does not have a production sharing regime with the Government on oil and gas it produces from fields given to it on nomination basis.