Home / Bangladesh / BTRC orders GP not to hinder audit process

BTRC orders GP not to hinder audit process

4The Bangladesh Tele-communication Regulatory Commission (BTRC) on Tuesday ordered the country’s leading mobile phone operator Grameenphone (GP) not to hinder the ongoing audit of the company.
This move came following complains from auditing firm Toha Khan Zaman & Co that GP has not been helping the audit to run smoothly, although the work started three months earlier.
The auditors will look into the different financial matters of GP since its inception. An earlier BTRC audit in 2011 was declared illegal by the High Court, as the auditor was not appointed by following the proper legal protocol.
GP, in a letter to the BTRC on October 20 last year, had questioned the new audit process, asking how a new audit could be conducted, as the claim of the previous audit in 2011 still remains pending before the court. BTRC officials said that the appointment of the new auditor was done in a lawful manner and thus the operator has no reason to question its legality.
The HC, in its observation in 2011, also emphasised appointing a new auditor, as the audit found that GP owed the government Tk. 3,034 crore.
The BTRC sent a letter to GP yesterday, saying, “GP should not try to hinder the activities of the BTRC. Upon completion of the new audit, the issues raised by GP regarding the previous audit will be resolved.”
When questioned, BTRC chairman Shahjahan Mahmood said the commission is not happy with GP’s role in the issue.
“We have received complains from the auditor. The matter was also discussed in the commission’s meetings. We are not happy with the role of the GP,” he added.
When questioned, GP head of corporate affairs, Mahmud Hossain, said, “We have received the BTRC’s letter. We are currently analysing its contents.”
Past records of GP
GP was fined on two occasions in 2007 and 2008 for offering illegal VoIP services, compelling the company to pay Tk 418 crore to the telecoms regulator. Following the VoIP scam, GP top management had to go through a major reshuffle to retain its licence to operate in Bangladesh.
More allegations pending against GP
(1)According to a 2010 audit report initiated by the BTRC, GP has also not paid Tk 3,034 crore in taxes, and concealed certain information, including the number of its subscribers, to evade tax. The report was contested by the telecoms operator that led to litigation in the High Court. As per observation of the final verdict of the case, BTRC will now appoint a new audit firm to reassess tax evasion by GP.
(2)According to a report of the Comptroller and Auditor General (CAG) submitted in parliament on September 8 last year, the government has incurred a loss of Tk 19.20 crore over three fiscal years by realising licence fees at a lower rate, instead of the fixed rate, while leasing out Bangladesh Railway (BR) lands to GP.
Under the Land Management Policy 2006, licence fees were fixed at Tk 335 and Tk 223 per sft of land respectively in divisional towns, and in district and other town areas. However, BR realised the licence fee from GP at Tk 16, Tk 8 and Tk 6 per sft of railway land in Pakshi area in the western region in the fiscal years 2007–08, 2008–09 and 2009–10. According to the audit report, this caused huge revenue losses — to the tune of Tk 19,20,46,139. Again the GP authorities have filed a writ petition with the High Court, challenging the new enhanced rates of licence fees. The issue is now pending.
GP ownership structure
GP is a joint venture between Telenor (55.8%), the largest telecommunications service provider in Norway having mobile phone operations in 12 other countries, and Grameen Telecom Corporation (34.2%), a non-profit organisation of Bangladesh. The other 10 per cent shares belong to retail and institutional investors.