New Delhi: State-run BSNL, which was corporatised in 2000, had to “conceal” Rs10,000 crore on its books as it had stated its assets at Rs75,000 crore at the time of its formation against the transferred assets of Rs65,000 crore.
“The biggest challenge was to create an asset register of the company. A F Ferguson & Company, the appointed consultant for the corporatisation process at BSNL, estimated the total assets transferred to BSNL amounted to about Rs65,000 crore.
“However, the assets were at Rs75,000 crore leaving a gap of Rs10,000 crore that had to be concealed over a period of time,” BSNL Director (Finance) S D Saxena said in his book ‘Connecting India´ while describing the transformation of the entity from being a Government department to a corporation.
He said experts declared that BSNL would not be able to close its accounts for at least three years with such a gaping hole in its assets register. BSNL was directed by the DoT to close accounts for the remaining six-month period ending March 31, 2001, by December 2000.
BSNL officials, along with auditor PricewaterhouseCoopers, finalised the accounts in March 2002.
The amount of Rs65,000 crore was broken up into an equity of Rs5,000 crore and the rest was shown as reserves and surplus. Later, this was re-jigged to equity of Rs5,000 crore and preferential shares of Rs7,500 crore and a long-term loan of Rs5,000 crore with the rest shown as reserves as a balancing entry, he has stated.
Saxena, who retires this month-end, has played a key role in the transition of BSNL from a 145-year old government department to a corporate body.
The Physics post-graduate, who later became the CFO, narrates in his book the pain of a new corporate entity and said the hardships of moving into a new culture was clearly not mapped well.