The Appointments Committee of the Cabinet (ACC) approved appointment of Sarraf, who at present is Managing Director of ONGC's overseas arm, ONGC Videsh Ltd. Sarraf replaces Vasudeva, who turned 60 yesterday and is due to superannuate on Friday.
Sources in the Oil Ministry said the ACC, whose members include the Prime Minister, Home Minister and the minister of the concerned ministry, approved the appointment of Sarraf based on August 30 recommendation of the Government headhunter Public Enterprises Selection Board (PESB).
The appointment of Sarraf, 56, comes even as Moily was keen on getting Vasudeva one-year post-retirement extension on the plea that his appointment was delayed by eight months due to false complaints.
Also, ONGC needed his presence to complete ongoing strategic initiatives.
The Ministry, they said, had forwarded to ACC a proposal containing two sets of options -- give Vasudeva an extension or appoint Sarraf as the next Chairman and Managing Director of Oil and Natural Gas Corp (ONGC).
While Sarraf had all clearances, Vasudeva did not have approval of anti-corruption watchdog CVC which on February 10 had told the Ministry that there were "a total number of six complaints/cases against Vasudeva which are pending in the ministry and are yet to be taken to their logical conclusion".
The ministry, which in the proposal to the ACC, stated that CVC approval for Vasudeva might be taken post-facto, in a statement said the extension of Vasudeva was recommended by Moily "purely on merit and in the interest of the organisation i.e. ONGC."
Sarraf, 56, was Director (Finance) in ONGC before moving to ONGC Videsh Ltd (OVL) in September, 2011.
He transformed OVL into an aggressive overseas firm, stitching 4 deals worth over USD 11 billion since taking charge of the company. Vasudeva took over as Chairman of ONGC on October 3, 2011.
"On advice of the Department of Personnel and Training (DoPT) the proposal was submitted in the prescribed format for consideration of the ACC. "DoPT also advised to obtain comments from the CVC and the matter was accordingly forwarded to CVC.
Certain observations/ queries were raised by CVC regarding the pending complaints against Vasudeva.
"Considering that only few days were left for his retirement, the Minister of Petroleum and Natural Gas on recommendation of the Secretary, Petroleum, referred the matter back to the DoPT with complete vigilance profile of Shri Sudhir Vasudeva with a request to place the matter before the ACC for decision, as deemed appropriate," the statement said.
Earlier in the day, opposition BJP and the Left parties slammed Moily for seeking an extension for Vasudeva without CVC clearance saying this is the second instance of the UPA government ignoring CVC in appointment to key positions.
Earlier this month, Archana Ramasundaram, a 1980-batch IPS officer from Tamil Nadu, was appointed by the government as Additional Director in CBI apparently ignoring the anti-corruption watchdog's recommendation.
On November 4, 2013, Moily wrote to Prime Minister Manmohan Singh seeking one-year post-retirement extension for Vasudeva.
Sources said while the Prime Minister's Office (PMO) asked the Oil Ministry to submit a proper proposal, government headhunter PESB selected Sarraf to succeed Vasudeva on February 28.
Sarraf, who was previously Director (Finance) in ONGC, got CVC clearance, but the same for Vasudeva could not be obtained.