Idea books in order, say special auditors

The government-appointed special auditors who earlier cleared Bharti Airtel's accounts have now given a clean chit to Idea Cellular, as they could find no discrepancy in the books of the telco. Chhajed & Doshi, the special auditors appointed by the Department of Telecom (DoT), in their 115-page report, however, said the telco may be required to pay an additional Rs74 crore to the government.

At the same time, they say Idea Cellular may not have to pay Rs48 crore of this liability following telecom tribunal TDSAT's ruling that licence fee was payable only on actual realised revenues and not on notional revenues.

With this, Idea's liability reduces to just under Rs26 crore, and even this arises due to uncertainty on various issues such as whether telcos should share revenues on certain items from subsidiaries.
 
According to some analysts, the Rs74 crore liability arises due to the terms of the audit outlined by DoT. However, if one were to consider the TDSAT judgment and lack of clarity on the applicability of licence fees on insurance claims etc, then the special audit has established nil discrepancy on the books of Idea Cellular.

Welcoming the findings of the special audit, Idea Cellular managing director Sanjeev Aga said: "The special audit on Idea Cellular has reported no discrepancy. Indeed, it could not have."
"There are tabulations of some amounts, presumably from data collation as required by DoT. Such heads of accounts were treated in line with mandated accounting standards strictly as per TDSAT rulings and also the view of the special auditor is not to the contrary," Aga added.

In April 2009, the government ordered a special audit of the account books of top private telcos, including Reliance Communications, Bharti Airtel, Vodafone Essar, Tata Teleservices and Idea Cellular, to ascertain whether the companies had correctly reported and shared revenue with it.

The audits were intended to establish whether there are any discrepancies in the reported revenues of the companies. Telecom companies are required to pay 6-10 per cent of their annual revenue as licence fee and 2-6 per cent as spectrum usage charges. But, with reports of lower revenues, the component of revenue they have to share with the government goes down. The first report submitted in October 2009 pertained to the audit conducted on RCOM.