RCOM scrip slips over 6.5% on inflated income charges buzz

SHARES in Reliance Communications (RCOM), the country's secondlargest private telecom company by subscribers, fell over 6.5% to Rs 231.6 on Wednesday even as the markets closed at a 52-week high, after reports that the government-appointed special auditor has charged the telco with inflating wireless revenues by Rs 2,915 crore, besides evading Rs 315 crore in licence fee. RCOM has vehemently denied these charges. 
    An executive close to RCOM also clarified that Wednesday's fall in the company's shares were not related to concerns over the special audit. This executive pointed out that other telecom companies too witnessed a fall on Wednesday despite the markets soaring to a 17-month high. 
    India's largest telco Bharti Airtel declined by 3.25% while Idea Cellular fell by 2.99% in Wednesday's trade amid lingering concerns that the ongoing tariff wars would impact revenue streams, decrease margins and eat into the profitability of all service providers. 
    Meanwhile, the department of telecom (DoT) has constituted a four-member committee headed by its member-finance Vijayalakshmi K Gupta to examine the report submitted by the special auditor — Jaipur-based Parakh and Co. 
    "This committee will submit its recommendations within a month and the government will initiate action based on it. The communications ministry may also ask sector regulator Trai as well as markets watchdog Sebi to examine the special auditor's report," a DoT official told ET. When contacted, Sebi officials said that so far, they had not received any communication from the DoT with regard to the special audit report on RCOM. The day also witnessed intense speculation that Anil Ambani had met top officials of DoT and communications minister A Raja over this issue, but RCOM executives clarified that 'no such meetings had taken place'. Mr Ambani had met finance ministry officials twice during the day, but sources in ADAG emphasised that these was not related to the group's telecom operations. 
    Responding to a detailed query from ET, the RCOM spokesperson said that 'this was a mischievous conspiracy by corporate rivals.

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