Parliamentarians were incensed when Anna Hazare launched a public protest about their foot-dragging on the Lokpal Bill. But these modern-day maharajas continue to use telephone facilities without paying dues, an RTI reply has revealed
For common citizens defaulting on utility bills like telephone and electricity leads to only one consequence: their utilities are disconnected. However, being a Member of Parliament (MP) seems to have its perks-even to default a public utility.
According to a reply received by Right to Information (RTI) activist Subhash Chandra Agrawal, several MPs, past and present, owe over Rs7.31 crore to state-run Mahanagar Telephone Nigam (MTNL) and Bharat Sanchar Nigam (BSNL) towards telephone bills. That too when these MPs are allowed to make 1.5 lakh free calls every year. In the list of defaulters, there are six MPs from the current Lok Sabha and Rajya Sabha, while 399 are former MPs. Total dues of the current MPs amounts to Rs19.8 lakh, while the same for former MPs is Rs7.1 crore. These dues are from 1980 to October 2011.
Late ABA Ghani Khan Chaudhary (LS 495) tops the telephone defaulters' list with Rs34.43 lakh. He is followed by Janardhan Yadav (RS 040) with dues of Rs22.3 lakh and by Basava Raj Patil (LS 164) with Rs17.2 lakh. In case of sitting MPs, Ram Sunder Das (LS 079) tops the defaulter's with an outstanding of Rs9.5 lakh. He is followed by Bhakta Charan Das (LS 313) and M Krishna Swamy (LS 374) with dues of Rs3.32 lakh and Rs3.2 lakh, respectively.
At present according to the rules framed by the Parliament Secretariat i.e. the Housing and Telephone Rules of MPs Act, 1956, (as amended time to time), each Lok Sabha and Rajya Sabha MP is entitled to have five telephone connections, including two mobile connections, at different places and each MP is entitled to 1.5 lakh free calls every year on all these connections.
Calls made in excess in the 1.5 lakh free calls are carried forward to next year's quota. Similarly, unutilized calls also can be forwarded. Calls made within these limits are billed by BSNL or MTNL and the bills are paid by the respective secretariat of the Lok Sabha or Rajya Sabha. Beyond the quota of the current and next year's calls, the concerned MP has to pay the bill.
According to the RTI reply, there is a public interest litigation (PIL) going on in the Delhi High Court. The Department has set up a special PIL cell and has appointed arbitrators. In order to implement the award, if the payment is not received, recovery suits are being filed by the field units of BSNL, where the liquidity is possible, the Liaison Officer (Phones) said in his reply.
According to Mr Agrawal, there should be rules for auto-deduction of all government-bills from salaries and pensions of present and former Parliamentarians."No-dues certificate should be necessary from contestants before filing nomination for any election. Services like of telephone, water and electricity should be disconnected for non-payment of any single bill, similar to what is done in case of common citizens. Strict-most recover-proceedings should be immediately initiated against defaulting parliamentarians (former and present) and or their legal heirs," he said.
Canadian research firm Veritas charges that RCom is entering a phase of maximum uncertainty. The company calls the report mala fide.
The latest bombshell of a research report on Reliance Communications (RCom) by Canada-based Veritas Investment Research titled, "A House of Cards", alleges that the company is entering a phase of maximum uncertainty. The report further states that fractured policy making, high inflation, an uncontrollable fiscal deficit and the highly-competitive telecommunications sector, are all working against RCom.
The report states that the management will have to work out the debt repayment obligations of nearly $2.2 billion over the next two years even as the EBIDTA in its core telecom business is languishing.
RCom is reportedly downsizing its capital expenditure (capex) and is looking to hive off some of its assets. However, with the precarious position of the company in the Indian telecom sector, the reduction in capex would work against the interests of the company, the report stated. Veritas adds that RCom will have to improve its GSM spectrum position, and for this it would need higher capex to maintain its quality of service.
With most players in the telecom tower business out to monetize their assets, buyers for this business are scarce. Veritas goes on to say that its tower business arm, Reliance Infratel, would be able to monetize its tower assets at a lower value of Rs12,500 crore compared a valuation of Rs22,500 crore that the company is hoping to get.
RCom's subsea telecommunications infrastructure network business, Flag Telecom, which is expected to listed on the Singapore Stock Exchange through an initial public offer, is looking to garner around Rs7,500 crore to Rs10,000 crore. However, Veritas reveals that Flag has been pledged by its holding company, Reliance Globalcom BV Netherlands, to secure debt of $500 million, leaves very little deleveraging room for the ultimate parent RCom.
The Canadian research firm is also doubtful of the company's accounting policies, which "do not provide a clear picture of the underlying operating and business trends". Veritas questions the risk management and governance practices of the company. The write-off of Rs950 crore ($179.2 million) in FY10-11, which was advanced to a supplier, points out to incompetence of the company.
While RCom reported a profit before tax profit of Rs882 crore for FY11-12, Veritas believes that the company incurred loss before tax of Rs1,529 crore ($ 288 million).
The report concludes, "The company has a tendency to report high levels of other income which is not sustainable on a long term basis, given the significant drop in its current cash balance. Furthermore, based on the company's inclination to book expenses to reserves and include other income in its EBITDA, reported EBITDA is an unreliable indicator of the company's operating prowess. Therefore we ignore other income in our valuation."
However, refuting the allegations, a RCom spokesperson said, "Veritas report lacks any credibility and is mala fide. Orchestrated media dissemination reveals ulterior and dishonest motives. Report full of factual inaccuracies and baseless allegations masquerading as research. RCom is fully compliant with all prescribed accounting policies and governance norms. Attributed valuations reflect Veritas' complete lack of understanding of RCom's assets and businesses. Veritas is systematically working to destroy confidence in Indian capital markets through sensationalist reports".
The independent researcher applies an innovative 50% “governance discount” to the intrinsic value of Rs30
Reliance Communications Ltd (RCom) the crown jewel of Anil Ambani (if there is indeed any such jewel in his crown of thorns) should be valued at just Rs15, against the current market price of Rs65, according a new report by Veritas, the Canada-based independent research firm. Veritas has taken stunned the excel-driven and management-guided Indian analysts and institutional investors with its searing reports on R Com, Reliance Industries, DLF and Kingfisher among others.
How has Veritas arrived at the figure of Rs15 for RCom? It has introduced a new idea called "governance discount." Veritas suggests that investors should apply a governance discount of as much as 50% to the intrinsic value of the stock.
According to Veritas, the approximate value of stock is around Rs30. Applying a 50% governance discount, it values the core business at Rs15, "suggesting 77% downside from current levels."
In its calculations Veritas has refused to include any "other income", a favourite tool for management manipulation. According to Veritas, RCom "has a tendency to report high levels of other income which is not sustainable on a long term basis, given the significant drop in its current cash balance. Furthermore, based on the Company's inclination to book expenses to reserves and include other income in its EBITDA, reported EBITDA is an unreliable indicator of the Company's operating prowess. Therefore we ignore other income in our valuation."
This is the second report by Veritas on RCom. The previous one was in July 2011 when R Com was quoted at around Rs100. The stock is down 35% since then.