RCom fudged figures to save fees, says DoT auditor

Reliance Communication Ltd, India's second largest mobile phone company, has been accused by a government-appointed auditor of under-reporting revenue to the Department of Telecommunications to save on licence fees, while at the same time giving out inflated numbers to the stock exchanges to boost share value.

Parakh and Co, the Jaipur-based audit firm, which was asked to carry out a special audit of RCom by industry regulator DoT, said the Anil Ambani-controlled company sought to avoid paying around Rs316 crore in licence and spectrum fees in the two years ended 31 March 2008.

There was a difference of Rs2,915 crore in the revenue reported to the regulator and stock exchanges, with the bourses being given a higher figure, according to the audit report.

The operative sections of the report seem to have been selectively leaked to the media, as DoT says the report remains ''sealed'' and the government itself is yet to look at it. ''It will be opened and examined in good time,'' senior officials said.

In January 2009, the government had appointed a special committee to audit RCom's accounts. Subsequently, it appointed special auditors for all the major telecom operators. DoT is awaiting the report on four other companies - Tata Telecom, Bharti Airtel, Vodafone and Idea.

The report of Parekh & Co found that for FY08, actual wireless revenue earned by the company was only Rs12,298 crore, as against Rs15,213 crore reported to the shareholders.