The special independent auditor appointed by the DoT to review the accounting books of Tata Teleservices (TTSL) and its subsidiary Tata Teleservices Maharashtra Ltd. (TTML) has submitted its report pointing out discrepancies in the accounting books of the two companies for the fiscal years 2006-07 and 2007-08.

According to the report submitted by the auditor TTSL has considered revenues from prepaid vouchers net off discount commission offered to distributors amounting to Rs.112.48 crore and Rs.132.58 crore for fiscal years 2006-07 and 2007-08 respectively. Furthermore, after sales discounts were also offered to subscribers totaling Rs.40 crore and Rs.45 crore for fiscal 2006-07 and 2007-08 respectively.

TTSL however has not considered billing of Rs.14.22 crore and Rs.15.38 crore for fiscal 2006-07 and 2007-08 respectively. These billing was for use of phone connections by employees.

The auditor has also alleged that TTSL instead of netting off opex recovery (recovery of network, power, fuel and administration cost i.e. mainly related to passive infrastructure) has netted off with expenses amount of Rs178.38 crore and Rs.147.03 crore for fiscal 2006-07 and 2007-08 respectively.

Additionally the auditor pints out that there is a ‘unexplained’ difference of Rs.8.62 crore and Rs.20.76 crore for fiscal 2006-07 and 2007-08 respectively between revenue as per P&L account and revenue as per the service tax returns. The difference is added in the company’s AGR.

Importantly the auditor alleges that TTSL has not provided actual data related to interconnection charges and revenues. The auditor cites that this data is important since it would have helped in determining the spectrum charge for mobile services which the company is liable to pay. Another agreement which the company entered into with a handset distribution company has also not been provided to the auditor.

Earlier auditors of RCom and Bharti Airtel have also submitted their respective findings. While RCom was alleged to be involved in manipulating of revenues, Bharti’s auditor had given a clean chit to the company.