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RCom wants action against its special auditor

January, 21st 2010
Reliance Communications (RCom) has asked the department of telecommunications (DoT) to take action against its special auditor, Parakh & Co, for alleged breach of confidentiality and misconduct. It has also asked DoT to scrap Parakhs report, saying the conclusions are incorrect, unilateral and biased. The audit report, commissioned by the DoT, had alleged that RCom had hidden revenues of Rs 2,799 crore for the financial years 2006-07 and 2007-08, costing the government Rs 315 crore in licence and spectrum fees that are charged as a percentage of revenue. The auditor also said RCom inflated wireless revenue by 23 per cent or Rs 2,915 crore, to Rs 15,213 crore in the report to shareholders in 2007-08. The terms of reference did not require the auditor to make observations on consolidated financial statements. Moreover, they have finalised the report without any discussion or communication with us, the company said.