Wednesday, Aug-23-2017, 9.05PM

Bharti Airtel under-reported revenue: CAG Bharti Airtel under-reported revenue: CAG

Aug-12-2015 | 0 Comments

Story


KOLKATA: The national auditor has reportedly alleged that Bharti Airtel had suppressed and under-reported revenue to skirt licence fee and spectrum usage charge (SUC) payouts between April 2006 and March 2010 which led to a revenue loss of around 14,361 crore to the government, a charge that India's top carrier denied.

In a draft report, published on a website, the Comptroller & Auditor General (CAG) has alleged under-reporting of revenue by Bharti Airtel and its subsidiary Bharti Hexacom in the adjusted gross revenue (AGR) statements, primary books of accounts (trial balances), in P&L accounts and on prepaid, postpaid and roaming services between 2006-07 and 2009-10. Bharti Hexacom is a Bharti Airtel unit which runs GSM services in Rajasthan and Northeast.

A Bharti Airtel spokesman, in an emailed response to ET's queries, said that most of the points in the reported draft CAG report "have already been discussed and settled at various government/judicial fora" and "some are currently under litigation in various courts of law, awaiting decisions".

The CAG's draft audit report, being prepared for other telcos as well, has brought into focus the issue around the definition of adjusted gross revenue (AGR), based on which carriers pay their annual licence and spectrum usage fees to the government.

The definition of AGR has been a contentious issue since 2003. While the telecom department says it should include all revenue earned by a service provider, telcos argue that it should include only those directly related to telecom operations such as tariffs.

Separately, company sources told ET that the report in question was also a result of different interpretations of AGR, a matter which is in the courts. "We have anyways (sic) provided for the additional amounts, just in case the ruling goes against us," one of sources said. The apex court will next hear the AGR matter on September 8."

The Airtel spokesman, however, declined to comment directly on the findings of the "purported" draft CAG report. "We are not aware of any such report being placed by CAG in the public domain, and in the absence of an official report, as a matter of principle, we would not like to offer any comment," the spokesman said.

The telco, however, asserted that as a responsible corporate following the highest standards of corporate governance, "it has always been in compliance of all laws of the land, including but not limited to those pertaining to taxes and levies and all government policies and regulations pertaining to telecom operations."

In the draft report, the CAG has accused Bharti Airtel and Bharti Hexacom of less or non-payment of revenue. It alleged that Bharti Airtel and Bharti Hexacom wrongly debited expenses such as margin and commission and distributors/agents from revenue.

Company sources, however, said most matters, including prepaid-distributors margins, "are under litigation in the Supreme Court."

Average Rating (0 of 5)
0 1 2 3 4
Views: 752
Rate this:
1 2 3 4 5
Share this:
Share ThisShare.in

Poll

 


Which is your favorite city

 Bangalore
 Chennai
 Mumbai

Best Car

 BMW
 Audi
 Benz

Which color do you like

 Red
 Blue
 Green