Telcos likely to challenge Delhi HC order on CAG audit

Telecom majors are likely to challenge the Delhi High Court's order allowing the the Comptroller and Auditor General of India (CAG) to audit the accounts of private telecom operators under the relevant provisions of the law.<br /><br />

FP Staff January 06, 2014 14:41:55 IST
Telcos likely to challenge Delhi HC order on CAG audit

Telecom majors arelikelyto challenge the Delhi High Court's order allowingthe the Comptroller and Auditor General of India (CAG) to audit the accounts of private telecom operators under the relevant provisions of the law.

Today, a bench of justices Pradeep Nandrajog and V Kameswar Rao permitted the top accounting body to conduct audit of private telecom companies under the Telecom Regulatory Authority of India (TRAI) Act. However, according to a CNBC-TV18 report,telecom companies may approach the Supreme Court against the Delhi High Court order. Currently, the operators are taking legal recourse to decide the future course of action.

Telcos likely to challenge Delhi HC order on CAG audit

CAG got the crucial assignment after getting the mandate to audit power distribution companies from the Arvind Kejriwal-led Delhi government. Reuters.

Telcos had earlierargued that CAG can't audit private companies. To achieve the purpose of audit, the operators had pointed out that they have already put in place mechanism of special audit as envisaged in the license agreement between department of telecom and the companies. The firms had claimed they maintain accounts in line with the TRAI rules and can't be forced to furnish financials to CAG.

CAG had vigorously staked its claim to audit the accounts and sought revenue sharing details from the telecom companies.

CAG got the crucial assignment after getting the mandate to audit power distribution companies from the Arvind Kejriwal-led Delhi government.

CAG has said it has full powers to audit accounts of the telecom firms to ensure that claims to receipts have been "pursued with due diligence by Union and no loss occurred due to fraud and efficiency and effectiveness of the transactions has been maintained."

In 2009-10, the department of telecommunications (DoT) ordered CAG-empanelled auditors to audit the books of the telcos for the years 2006-07 and 2007-08. The firms were Bharti Airtel Ltd, Vodafone India Ltd, Idea Cellular Ltd, Tata Teleservices Ltd and Reliance Communications Ltd (R-Com).However, theoperators then approached the Delhi high court saying private companies fell outside the jurisdiction of the public auditor.

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