Anil rubbishes RCOM special audit report

Anil rubbishes RCOM special audit report

26 October 2009

MUMBAI: Anil Ambani on Thursday alleged there was a “vicious and mala fide” campaign against his telecom company Reliance Communications (RCOM) Anil Ambani by a “known rival group” and dubbed the special audit report, which claimed that RCOM was mis-stating its revenues as “biased and prejudiced”. But the auditor, Parekh & Co defended its work and also denied a claim by Mr Ambani that it had not sought feedback from RCOM.

It was Mr Ambani’s first reaction after some parts of a special audit report, which alleged that RCOM did not show revenues of Rs 2,799.19 crore for the financial years 2006-07 and 2007-08 costing the government Rs 315 crore in terms of licence and spectrum fees that are charged as a percentage of revenue, was leaked out early this week.

Jaipur-based Parakh & Co, the auditor, also alleged that RCOM inflated wireless revenue by 23% or Rs 2,915 crore to Rs 15,213 crore in the shareholder’s report in 2007-08.

DoT appointed the special auditor to examine the allegations of evasion of license fee from the Cellular Operators Association of India, the association of GSM companies. The audit was later extended to other telcos including Bharti, Idea, Vodafone and Tata Teleservices. These audits are underway.

“I must straightaway point out that whatever alleged remarks the special auditor has arrived at are completely unilateral, biased and prejudiced, because, contrary to basic standards of professional conduct, and against all auditing norms and practices, the alleged report/findings have not even been discussed by the special auditors with RCOM till date — even though they have been conducting the audit for the past more than six months,” Mr Ambani said in a conference call in Mumbai.

He also said the special auditors, who he claimed were under the influence of his business rivals, had “exceeded their terms of reference and recorded unwarranted and completely incorrect findings on matters beyond the scope of their audit, thereby again demonstrating their bias and prejudice.”

Courtesy: The Economic Times