Telcos challenge Delhi HC order on CAG audit

DoT audited Bharti Airtel, Vodafone India, Reliance Communications, Tata Tele and Idea Cellular in 2007-08

The comptroller and auditor-general (CAG) should audit the account of the department of telecommunications (DoT) and not of telecom operators, felt Association of Unified Telecom Service Providers of India (AUSPI).

Recently, the Delhi high court had allowed the CAG to audit private telecom companies, as the government received revenue share from these. This move is being  challenged by AUSPI in the Supreme Court.

AUSPI felt this was unconstitutional, and private parties are not to be audited by CAG. “The licence fee, which an operator pays from its revenue, goes into the accounts of DoT which in turn flows to consolidated fund of India. Hence, the receipts by DoT which is payable to the consolidated fund, can be audited by CAG,” the industry body said.

According to the petition filed by AUSPI, Section 16 of CAG Act says its jurisdiction is limited to auditing the accounts of all receipts which are payable by various departments of the Union and states into the consolidated fund of India. It also said allowing CAG to audit them is a breach of licence conditions. Only DoT can conduct special audits of telcos.

C S Rao, president of AUSPI, said if telecom operators were allowed to be audited, a lot of private companies would fall under their ambit as well.

“Every company which pays excise duty and everyone who pays revenue to the government will come under CAG audit,” he told Business Standard.

Some of the audits conducted by DoT on telecos had opened up many gaps. DoT audited five telecom companies — Bharti Airtel, Vodafone India, Reliance Communications, Tata Teleservices and Idea Cellular in 2007-08. Based on these audits as much Rs 1,600 crore penalty was slapped on these operators.

 

Asked whether an audit could make them more transparent, Rao questioned, “Where is the limit to transparency? We should go by the rules.”