Supreme Court ruling to add to complexities: telecom companies

New Delhi, April 18: The Supreme Court ruling allowing Comptroller and Auditor General (CAG) to audit accounts of telecom companies will become a larger issue for corporate India and not just mobile operators, industry body Cellular Operators Association of India (COAI) said.

"By the logic of the court, every tax payer should also be subject to audit by the CAG, in addition to the IT Department. This ruling will become a larger issue for corporate India and not just mobile operators," COAI Director General Rajan S Mathews said in a statement.

"We are disappointed with the order but we will abide by the judgement," said Ashok Sud, the Secretary General of Unified Telecom Service Providers of India (AUSPI).

Mr Mathews said there are concerns that there will be multiple audits by multiple agencies (DoT, TRAI, TERM, SEBI and now CAG), increasing the costs and time to operators.

"Supreme Court judgement allowing CAG to audit telecom companies to ascertain whether the government is getting its due share is likely to add to the complexity of the operating environment of the telecom companies," Deloitte Haskins & Sells Partner Hemant Joshi said.

He said the ruling would add to the perception that India is difficult country to do business.

"It could then extend to mining, power, airline, banking, manufacturing, services companies and individuals etc," he added.

The Supreme Court held that the national auditor can audit the account books of private telecom companies which share revenue with the government for using spectrum.

The court passed the order on a batch of petitions filed by telecom companies' associations, including AUSPI and Cellular Operators Association of India (COAI), challenging the Delhi High Court verdict which had given green signal for CAG audit of the firms' accounts.

PTI