Friday, January 14, 2011

MTNL accuses Tata Communications Ltd(TCL) of Rs 243.55 MM fake ILD charges

While reading the MTNL notes to accounts for 2009-10, Note 30 was really surprising. Companies have commercial disputes but taking it to this level is strange. The amount is small in comparison to the turnover/assets/profits of either company but reflects poorly on TCL's internal controls. This matter was not publicized and even the press has not captured it.To quote the note(emphasis added)
In respect of MS Delhi, a sum of Rs. 243.55 million payable to TCL for ILD charges for the period Oct- 09 to March-10 has not been paid due to heavy spurt in ILD traffic towards M/S TCL. On technical analysis it was found that these calls were made to some dubious and tiny destination. These destinations do not confirm to national numbering plan of the respective countries and are not approved destinations as per approved interconnect agreement. Further these calls has not got physically terminated to the destinations The observations were shared with M/S TCL. M/S TCL has also been advised that the balance which relates to fraudulent calls is not payable and accordingly no provision has been made in the books of accounts. However the above has been shown as part of contingent liability.
If other telcos start auditing their bills from TCL, are we looking at an earnings surprise sometime in the future?

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