RCom, Tatas give fin books to CAG; Airtel, Vodafone partially

Government auditor CAG today said it will look into the financial books of leading telecom firms from August 16 to see whether there was any under-reporting of revenues by them, causing a revenue loss to the government on annual licence fees.

"While Reliance Communications and Tata Teleservices have submitted their books in full, Vodafone and Airtel have given access to their documents partially," a government official told PTI.

The leading operators, Bharti Airtel, Vodafone, Tatas, RCom and state-run Bharat Sanchar Nigam Limited (BSNL) have been asked by the Comptroller and Auditor General (CAG) of India to submit their account books for the last three financial years to ensure that they were paying what is due to the government in terms of annual licence fees.

The Supreme Court on August 2 had asked these telecom firms to give their financials to the Comptroller and Auditor General (CAG) of India within two weeks.

"We will start looking into financial details of these firms from August 16, as these companies will now have to submit their books compulsorily," the official said.

The CAG had been asked by the Centre to check if there was any under-reporting of revenue for calculating the annual licence fee. However, the telecom companies were opposed to this on the ground that they are already scrutinised by the Department of Telecom (DoT).

The CAG, however, said that it was not auditing the books of accounts of the service providers per se, but only those records which are related to the determination of their adjusted gross revenues (AGR) to determine whether the share of revenue being paid by them as an annual licence fee to the government was correct.

"This is a first-of-its-kind of audit of the telecom companies and they are feeling the pinch. We will just see that the government's share has been properly calculated out of the total revenue," he said.

As per the revenue-sharing arrangement with the government, the telecom companies are required to share 10 per cent of their AGR in Circle A areas, 8 per cent in Circle B and 6 per cent in Circle C as an annual licence fee.

The two telecom lobby groups -- COAI (GSM operators) and AUSPI (CDMA players) -- had challenged the CAG direction to the telcos to submit their revenue-sharing details for auditing.
    
Under the Companies Act, 1956, the CAG can audit the books of only those companies in which the government owns more than a 50 per cent stake.