Auditor says RCom has inflated revenue
New Delhi, Oct. 12: A government-appointed auditor is understood to have found inflation of revenues by Rs 2,915 crore by the Anil Ambani group firm Reliance Communications in 2007-08, besides evasion of Rs 315 crore in licence fee — findings termed as “biased” by the company.
When contacted the department of telecom (DoT) sources confirmed receipt of the report by auditors Parekh and Co and said that it is yet to examine the findings. The DoT would ask for RCom’s response later.
“RCom is in full compliance of licence terms and conditions,” a company spokesperson said, adding that “Auditors’ alleged comments are biased and appear instigated by corporate rivals... Premature leakage of confidential report to media reflects the Special Auditors’ prejudice/bias”.
“All revenues for FY’07 and ’08 are correctly reported in RCom’s audited account. Alleged comments of the special auditor do not reflect any under-reporting of revenue... licence fees.”
The spokesperson said revenues were correctly booked from securitisation of bad debts received from RIL in 2005 and from the sale of pre-paid cards in line with industry practice.
The special audit committee report that has been submitted to the DoT found that for the FY’08 actual wireless revenue earned by the company was only Rs 12,298 crore as against Rs 15,213 crore reported to the shareholders, which is an over reporting of Rs 2,915 crore.
It also found that RCom evaded the licence fee and spectrum fee to the tune of Rs 315 crore.
The DoT is awaiting the report of four other companies namely Tata Teleservices, Bharti Airtel, Vodafone and Idea from the respective auditors appointed by it and the government, if warranted, will take necessary action after examining the reports.
Sources, quoting the report, said that the telecom firm may have also violated the Trai and the DoT rules.
Alleging overstatement and fudging of revenues, the auditors have said that the company accounted twice, a revenue of Rs 617 crore in two different accounting years.
