Government has initiated arbitration proceedings against Videocon Petroleum Ltd (VPL) for using Ravva oil field assets as collateral for raising over Rs 900 crore loan from financial institutions without its permission. The arbitration proceedings, which would be held in Singapore, follow VPL entering into a debenture trust deed with IDBI and UTI for raising a loan of over Rs 900 crore by creating charges out of the Ravva assets. “We have initiated arbitration, as in our opinion creation of such charges in favour of two FIs - the IDBI and UTI - is violative of the production sharing agreement between the government and the operators,” petroleum secretary B K Chaturvedi said.
