Govt turns the heat on RCom on revenue reporting

The government has asked the Telecom Regulatory Authority of India (TRAI) to speed up its responses on the allegations that Reliance Communications (RCom) has violated revenue reporting norms. The government will also appoint a special auditor to scrutinise RCom’s books.

In a letter dated February 3, 2009, the Ministry of Communications & IT has asked TRAI to urgently proceed with the matter and “expedite” its response on the issue. It has also stated that a special auditor will be appointed to scrutinise the books of RCom.

When contacted, an RCom spokesperson said, RCom’s revenue reported to TRAI included revenue from data services in addition to the revenue from voice related services. Under the arrangement, RCIL pays RCom for wireless data carried on the latter’s network and this has been examined both by DoT and TRAI and have accepted as being compliant with regulations.

“We may clarify that RCom pays licence and spectrum fee on such revenue. Neither DoT nor TRAI have in any communication to the company referred to any cross booking of revenues of RCom in the accounts of its subsidiaries. The subsidiaries account for revenue from services rendered by them such as Internet services and handset sales, whereas RCom records the revenue for the services rendered by it and there is no overlapping or cross booking between the two, it added.

Our statutory accounts - both standalone and consolidated - are audited by our joint auditors, B.S.R. & Co., a member firm of KPMG, an international accounting form and by Chaturvedi & Shah, a member firm of Nexia International, also an international accounting firm. The audit includes audit of revenues also, it said.