Finds CAG audit
The government lost Tk 76.96 crore in revenue during the transfer of 70 per cent share of Warid Telecom to Indian mobile company Airtel in 2010 as the Bangladesh Telecommunication Regulatory Commission imposed lower fees violating relevant act, found a government audit.
The telecom regulator did not collect the share transfer fees from Warid at the rate of 5.5 per cent of actual asset or share capital which violated the telecommunications act, said the audit report of the Comptroller and Auditor General which would be sent to parliament soon.
The BTRC collected only Tk 3.80 lakh as share transfer fee after accepting the company’s token valuation asset of Warid at only $1 lakh or around Tk 70 lakh
whereas the company’s 2009 audited financial statement showed that the total share capital value was Tk 1,399.99 crore, said telecom ministry sources quoting the report.
‘If the 2009 audited financial statement of Warid is taken into consideration, the actual transfer fee should have been Tk 76.99 crore whereas only Tk 3.80 lakh was taken [by BTRC] causing a revenue loss of Tk 76.96 crore,’ said the report.
The acquiring of Warid shares by Airtel in 2010 with such a minimum fees caused a stir in the telecom industry during that time as many alleged that the BTRC took the move to favour the company.
The parliamentary standing committee on the planning ministry in January 2011 described the acquisition of 70 per cent of the stake in Warid Telecom by Airtel as ‘questionable’, with indication of ‘underhand deal’, but the matter is yet to be resolved by the committee.
Airtel recently acquired the rest 30 per cent of Warid share but the financial details of the deal has not been made public.
The CAG audit report said during the transfer of 70 per cent Warid Telecom manipulated it’s share price to evade the transfer fee as the Tk 100 face value of each share was shown at Tk 0.06 just before the transfer.
The Warid transferred 11,44,74,640 shares of the company to the Airtel worth Tk 68.68 lakh without any permission from Bangladesh Securities and Exchange Commission, it said.
The BTRC on January 4, 2010 approved the transfer with a condition that Airtel will make fresh investment of $300 million.
It also said Warid also did not transfer 70 per cent shares to Airtel at that time as per the deal.
In February 25, 2010, Warid increased its number of shares from 20 crore to 47 crore through and transferred additional 25,98,28,057 shares to Airtel at a rate of Tk 79.82.
‘In a month’s gap the share price rose to Tk 79.82 from Tk 0.06 which clears that that devaluation of share prices was intended to evade the government tax,’ said the report.
The valuation of the second transfer was shown as nearly $300 million for the Airtel, it said.
In reply to the audit queries, the BTRC said that the telecom regulator is not liable for the valuation of shares during any such transaction rather it is the responsibility of the Registrar of Joint Stock Companies and Firms.
It said the Warid also got the SEC approval for the transfer and the BTRC is not responsible for collecting any fees against any such transfer.
Following the BTRC reply, the Post and Telecommunication ministry also suggested the OCAG office to dispose of the audit objection.
The audit office rejected the BTRC reply saying that as per the telecommunication act of 2007 the BTRC is liable to collect the transfer fees in such cases at the rate of 5.5 per cent on the asset of share value.
The BTRC in the same year collected Tk 131.67 crore transfer fees at the rate of 5.5 per cent from the Aktel when the company sold its stake to Robi, the report also mentioned.
It also recommended immediate collection of the money from Warid Telecom and submit the documents to the audit office.
When asked about audit objection of CAG on Warid-Airtel share transfer, Telecoms secretary Abubakar Siddique told New Age that they had already requested the audit office to settle the audit.
‘It is an ongoing matter. If the CAG is not pleased with our replies it can place the matter with the parliament and then we will take action as per the decision of the Public Accounts Committee of the parliament,’ he said.
-With New Age input
