Many have been impressed with Anil Ambani’s strategy of using the media to condemn his brother, but Mukesh Ambani’s strategy has also been a sensible one. He has chosen to keep quiet for a variety of reasons. Topping this list, of course, is that the government is on his side, so he does not need to join issue with his brother. Also, his strategy of refusing to comment on sub judice issues has gone down very well since hurling allegations loses its charm when the other side doesn’t react.
Most important, he is giving his brother a long enough rope. In the last one week (‘Physician, heal thyself’, Oct 14), Anil Ambani has been caught out twice. A few days ago, the Appellate Tribunal for Electricity (ATE) upheld the Delhi Electricity Regulatory Commission (DERC) order on the Anil Ambani-owned BSES. The DERC had held that BSES had overstated its expenses by several hundred crore rupees by producing bills for work done by a group company. Since this money was to eventually have been paid by consumers of electricity, the DERC disallowed it. BSES went to ATE in appeal, and ATE rejected the appeal.
And now the special auditor appointed by the telecom ministry has found that Anil Ambani-company Reliance Communications has under-reported its revenues to the TRAI by Rs 2,800 crore and this resulted in a loss of Rs 316 crore to the government in terms of licence fees. Reliance Communications was reporting a different revenue to its shareholders and a different revenue to the government — it was doing this by arguing the difference was actually the revenues it got from the internet business and it did not report them to the government since there was no licence fee due on such revenues. The auditors, Parakh and Company, found no truth in this and held that the company was disguising its routine telecom revenues as internet revenues in order to avoid paying licence fees. The auditor’s findings, though, need to be checked once again since it is reporting two apparently contradictory sets of figures. It says RCom reported earnings to the government were lower than those reported to the shareholders and then it says the figures reported to the shareholders were exaggerated — both can’t be correct, can they?
Do the supporters of Anil Ambani have anything to say about this?
N Kumar, on email
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