India’s largest oil and gas producer said the move by the Competition Commission of India to initiate a full investigation into the way the company hires offshore support vessels will have no material impact on the company.
Under SEBI guidelines, listed companies must disclose any development that will have a material impact on the company or its finances.
Investigations by the Competition Commission are usually considered to have the potential to impact the subject company in a material way. As such, the NSE had written to the oil and natural gas company whether it had failed to make a disclosure of a material event.
“The article is unlikely to impact the company materially and as such, there is no non-compliance under Regulation 30 (of the Listing Obligations and Disclosure Requirements Regulation),” ONGC said in response.
The case was filed by Indian National Shipowners’ Association, a trade body, which alleged that ONGC was abusing its market dominance by inserting a clause in its contract that gave it the exclusive power to cancel a contract without assigning any reason.
The Association also pointed to past instances in which the company had made use of the clause and terminated contracts for vessels that provide support for its offshore drilling and production activities.
“The very stipulation of such one-sided clause, which gives an unfettered right to a dominant party to use it in its favour without giving any reciprocal right to the other party to the agreement, is prima facie abusive,” the commission said, and ordered an in-depth inquiry into the matter by its investigation department.