Government to conduct special audit of telecom firms: Prasad

The government has decided to conduct a special audit of telecom companies to check possible understating of accounts as indicated by the country's official auditor, Communications Minister Ravi Shankar Prasad said on Friday.

The remarks follow the tabling in parliament of a report by the Comptroller and Auditor General (CAG), which pointed toward understating of revenues by six telecom companies and causing the exchequer a loss of nearly Rs.12,500 crore.

"The CAG report on sharing of revenues by private telecom service providers during 2006-07 to 2009-10 has indicated there was a total understatement of Rs.46,045.75 crore in gross revenues by six operators," Prasad told a hurriedly-convened press conference here.

"This has a corresponding impact of Rs.3,752.37 crore on license fee and Rs.1,460.23 crore in spectrum usage charge," the minister said.

"I have taken a grim view on this. This is again a legacy issue of the previous government. The department is also going to undertake a special audit as permissible under the licensing conditions for three years -- 2008-09, 2009-10 and 2010-11."

But the two telecom bodies of India -- Cellular Operators' Association of India (COAI) and the Association of Unified Telecom Service Providers of India (AUSPI) -- said the issues pointed out by the CAG had already been settled.

The minister, however, said that even though in terms of well-established parliamentary procedures, the matter will go to the Public Accounts Committee, officials had been directed to put in place a robust system to ensure that such actions do not recur.

He also said a special audit was done earlier for 2006-07 and 2007-08, based on which a demand of Rs.1,846.51 crore against five telecom companies -- Bharti Airtel, Reliance Communications, Vodafone, Idea and Tata, were issued.

"They have challenged this in the court."

The two telecom associations said the matter related to the interpretation of what constitutes gross revenue and adjusted gross revenue of member companies for calculating license fee. These, they added, were under litigation in various judicial forums including

"The issues pointed out by the CAG pertain to those disputes, which have either been settled or stayed by various courts," the two bodies said in a joint statement.

"Further, we would like to reiterate that our member companies follow the highest standards of corporate governance and have always been in compliance with all regulations."