Lanco issue with Ministry of Corporate Affairs
The ‘Lanco issue’ is with the Ministry of Corporate Affairs. A final verdict on the issue should be expected by April 2.
These are the two key takeaways from a conversation that Business Line had with a senior official of the Ministry of New and Renewable Energy.
The allegations against Lanco are of two categories.
First, that Lanco has not met the project completion deadlines.
Second, Lanco has misled the Government on the question of ownership of projects and has won several projects using an opaque ownership structure when the rule says that a developer can secure only one project.
On the question of deadline, the Government, acting through NTPC Vidyut Vyapar Nigam (NVVM),has already encashed the bank guarantee for not meeting the first deadline.
Two subsequent deadlines have passed, but NVVN has not yet encashed the bank guarantees related to these, because it is in the process of verifying whether the projects, (including those whose names have been linked with Lanco,) have been completed or not.
The projects that are located in Rajasthan that were issued completion certificates were found to include partly commissioned projects and hence the revalidation of projects by MNRE.
On the issue of ownership, the matter has been referred to the Ministry of Corporate Affairs.
There has been some delay in the Ministry giving its view as to whether or not the companies alleged to be owned by Lanco are actually Lanco-owned or not.
What is interesting according to sources is that if there issues with ownership, the PPA itself should be annulled and the bank guarantees should not have been encashed after the investigation begins. However, the 3-member committee that was formed to go into the allegations against Lanco had sought a month’s extension of time to give its verdict.
This deadline expires on April 2, but MNRE is hopeful of coming up with a definite verdict by that date.