Accounting firm submits report on RCom’s books

Accounting firm submits report on RCom’s books

Mumbai/New Delhi: A Jaipur-based accounting firm appointed to study the books of Anil Ambani’s Reliance Communication Ltd., or RCom, on Wednesday submitted its report to the department of telecommunications (DoT), which had initiated the scrutiny.

Two persons familiar with the matter, who declined to be named because the contents of the report, prepared by Parakh & Co., are not known yet, confirmed the submission. One of the persons said the report, which was delivered in a “sealed envelope", will be opened on Monday.

An RCom spokesperson declined comment on the development.

A four-member committee of DoT will now examine the report, which was submitted after the auditors were given a three-month extension.

In July 2008, a report by Mumbai-based brokerage Kotak Securities Ltd said that RCom, the country’s second largest mobile phone firm by customers, was reporting different revenue figures to shareholders and the Telecom Regulatory Authority of India (Trai), the sector regulator.

The audit was commissioned in January 2009 to check if revenues were being diverted to segments that attracted lower licence fees and if this was resulting in revenue losses to the national exchequer.

DoT later expanded similar audits to cover other phone firms such as Bharti Airtel Ltd, Vodafone Essar Ltd, Idea Cellular Ltd and Tata Teleservices Ltd after Trai found similar discrepancies in their accounts.

The reviews for the four firms, and RCom, pertain to fiscal 2007 and fiscal 2008. Any violations detected during the audit could lead to the phone firms being subjected to penalties.