About 323 residential lines were allegedly installed in the name of BSNL general manager connecting the Boat House residence of Maran with the office of Sun TV through a dedicated underground cable
The Central Bureau of Investigation (CBI) has filed a case against former telecom minister Dayanidhi Maran and officials of state-run Bharat Sanchar Nigam Ltd (BSNL) for allegedly allotting 300 high-speed telephone lines to Maran's residence in Chennai which were extended to his brother's TV channel.
CBI said a first information report (FIR) was filed following its preliminary enquiry when it found enough material to proceed with a regular case against Maran and BSNL officials -- the then chief general manager K Bramhanathan and MP Veluswami.
The agency which had registered the enquiry into allegations in 2011 had wrapped up its probe in July.
The sources said these 323 residential lines were allegedly in the name of BSNL General Manager connecting the Boat House residence of Maran with the office of Sun TV through a dedicated underground cable during his tenure as Telecom Minister.
The probe had started in 2011, nearly four years after getting complaints that a 'virtual' telephone exchange was allegedly set-up at the then telecom minister's for facilitating data transfer from Sun TV.
The agency had recommended action to the then Telecom Secretary in 2007 but the department allegedly did not give its nod in the case, they said.
Finally, CBI had filed a preliminary inquiry in the case in 2011, they said.
The sources said these lines were not ordinary telephone lines but costly ISDN, capable of carrying huge data thus facilitating faster transmission of TV news and programmes across the globe.
CBI in its report to the Telecom Secretary had alleged that these lines were for use of large commercial enterprises to meet special needs such as video conferencing or transmission of huge volume of digital data for which heavy fee is charged but Sun TV got it for free.
How did ICAI president Subodh Agrawal, who is also chairman of the audit committee of Gujarat NRE Coke, recommend unaudited financials of the company’s Australian subsidiaries to the Board of Directors, knowing fully well that they are highly material amounts?
When I first read an article in BusinessWorld written by a fellow journalist, I couldn't believe my eyes. Therefore, as any journalist would do in such cases, I decided to dig deeper. () What I discovered was eye popping. Gujarat NRE Coke, a company listed both on BSE and NSE, is telling shareholders that in its consolidated financial statements, 91% of its assets and 64% of its revenues (which are in Australian subsidiaries) are unaudited!
The Indian auditor of the consolidated financial statements (a Kolkata-based firm) mentions it as "Other Matter" in the audit report and says he has relied on "Management approved financial statements" as far as Australian subsidiaries’ accounts are concerned. The auditor of the Australian subsidiaries (Grant Thornton in Australia) says they cannot express an opinion on the financial statements since they have doubts on the company's ‘Going Concern’ assumption, valuation of impairment and assets, deferred tax assets, recoverability of trade receivable and completeness of contingent liabilities.
So, what is the total amount of assets contained in Australian subsidiaries? Rs8,500 crore or 91% of the total Rs9,300 crore assets in consolidated financial statements! As for revenues, Australian subsidiaries account for Rs1,400 crore or 64% of Rs2,150 crore revenues in consolidated accounts. Many questions arise, but a few are basic:
This is what the note of the Indian auditor says: (Page 51 of annual report) (http://www.gujaratnre.com/Annual%20Report/GNCL%20Annual%20Report%202012-13.pdf )
“We have relied on the unaudited financial statements of all the Australian subsidiaries as referred in note no 31 of the Consolidated Financial Statement, whose financial statements reflect total assets of Rs8,532.55 crore as at March 31, 2013 and total revenue of Rs1,394.86 crore and net Cash outflows of Rs5.61 crore for the year ended March 31, 2013. These unaudited financial statements has been approved by the Management Committee of the respective subsidiaries and have been furnished to us by the management, and our report in so far as it relates to the amounts included in respect of these subsidiaries are based solely on such Management approved financial statements.”
for NC Banerjee & Co.
(Firm's Registration No. : 302081E)
Place: Kolkata (Partner)
Dated: 30th May, 2013 Membership No. 06490
I was tempted then to look at the audit report of the Australian subsidiaries and someone was kind enough to give me the link....
The Grant Thornton audit report, while refusing to even give an opinion on the financials of the Australian subsidiaries, says as follows (pages 81-83):
Independent Auditors’ report:
Basis for disclaimer of opinion:
“We have been unable to obtain sufficient appropriate audit evidence on the books and records and the basis of accounting of the consolidated entity. Specifically we have been unable to satisfy ourselves on the following areas:
As a result of these matters, we were unable to determine whether any adjustments might have been found necessary in respect of the elements making up the consolidated statement of financial position, consolidated statement of profit and loss, and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows, and related notes and disclosures thereto.
Disclaimer of Opinion:
Because of the significance of the matters described in the Basis for Disclaimer of Opinion paragraphs, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Accordingly, we do not express an opinion on the financial report. …….. "
Grant Thornton Audit PTY LTD
Jain Kemp – Audit & Assurance
Sydney, 15 August 2013
I must confess I have no hope left in our Council. But I do strongly feel that if no action is taken in this case, none of the members of ICAI should depose before ICAI's Disciplinary Committee, headed by ICAI President Subodh Agrawal, who has shamed the profession.
(Arun Giri is a freelance journalist. He was former Associate Editor of Bloomberg UTV and former Special Correspondent of CNBC TV18)
Shares of shipping and paint companies advanced 7% each; shares of healthcare and non-ferrous...