The country’s telecom regulator has stepped to make an audit of share transactions between mobile phone operator Airtel and Warid Telecom back in 2010 as the CAG office suspects that there was a huge price manipulation.
Comptroller and Auditor General (CAG) office recently said the government has lost an amount of Tk129.99 crore in revenue due to the manipulation.
In 2010 Bharti Airtel bought 70% shares of Warid Telecom at a total price of $100,000 and paid 5.5% of the amount to the government as revenue under a rule now invalid. Warid sold the remaining 30% stake to Airtel in 2013 for a total amount of $85m when the rule was no longer effective.
While making audits of 17 government organisations including the telecom regulator BTRC recently, CAG office said the shares price in the 2010 transaction was shown incredibly low and the regulator, therefore, should take an audit initiative to find the fact.
Bangladesh Telecommunication Regulatory Commission (BTRC) has already sent a letter to the government seeking approval for an audit as the regulator will need to hire a private audit firm. The cost to hire an audit firm is estimated at Tk25 lakh.
Besides, CAG made special audits of BTRC for the period between FY2001-02 and FY2009-10, which found the government had lost a total of Tk2,628 crore in revenue because of financial anomalies.
The audit reports will be placed in parliament soon.
BTRC, however, didn’t agree with the amount, saying the figure could not be that much, but subscribed to the CAG’s objection about Airtel’s shares price.
“If a private firm makes audit again, we should welcome that to resolve the issue,” said a BTRC official.
Official sources said although the face value of Warid shares during the 2010 takeover was Tk100 each, the price was shown Tk0.06. Warid transferred over 114m shares to Airtel at Tk68.68 lakh without permission from Bangladesh Securities and Exchange Commission.
On 25 February 2010, Warid, however, increased the shares from 200m to 470m, and transferred an additional over 259m shares to Airtel at a rate of Tk79.82.
“In a month’s gap, the share price rose to Tk79.82 from Tk0.06, which makes it clear that the devaluation of share price had been intended to evade government tax,” the CAG audit report said.
On January 4, 2010, the BTRC had permitted Warid to sell 70% of its stakes for only $100,000 (around Tk70 lakh). It withdrew the 5.5% revenue-sharing decision on February 8 that year.
But after three years Warid transferred the remaining 30% shares for $85m, which is more than 2,000 times higher than the previous transfer value, according to the document available with the Dhaka Tribune.
Sunil Kanti Bose said, “The CAG office asked us several times to make an audit (of Warid-Airtel share transfer) by a third firm. As there was no official order, we had taken any step.”
He also said: “There is no way you can say the share transfer was illegal. According to documents, everything was okay and the then BTRC made decisions based on those papers.”
A BTRC source said the telecom regulator will go to audit the mobile phone operator’s shares takeover next year. He said seven international firms have already submitted proposals to conduct the audit in association with local audit companies.