GP shares rise despite BTRC payment

A staggering Tk1,000 crore payment to the telecom regulator yesterday did not affect Grameenphone's share prices, which rose by 8 percent later in the day.

The country's largest telecom operator paid the Bangladesh Telecommunication Regulatory Commission (BTRC) Tk1,000 crore in compliance with a court order on a disputed audit claim of Tk12,580 crore.

GP shares gained 22 percent in the last five working days at the Dhaka Stock Exchange and the Chattogram Stock Exchange.

Stock brokers told The Business Standard that there had been lots of sales orders of Grameenphone shares over the week. However, larger buy orders absorbed all the supplies and led to the ongoing price recovery.

A telecom analyst at a top brokerage firm told The Business Standard that Grameenphone shareholders were eagerly looking forward to an ending of the dispute with the BTRC.

"The attitude in the market seems like any kind of settlement that lets the leading telecom operator come back to the normal course of business will do – no matter how much that costs," he said.

"The market has already discounted the possible financial burdens on Grameenphone," said another equity analyst. "Hence, the news of the court order to pay the BTRC was not bad at all."

The two analysts, like most other investment professionals, believe that Grameenphone shares are undervalued compared to the company's previous records and valuation of peer businesses.

Grameenphone disputes validity of BTRC audit claim

On Sunday, a four-member team led by Grameenphone's Head of Regulatory Affairs Hossain Sadat handed BTRC Chairman Jahurul Haque the Tk1,000 crore pay order around half past three at a programme at the commission's office in the capital.

Thanking Grameenphone, Jahurul said this was a good news for the commission that the company realised there was a misunderstanding.

"Now they have properly understood the matter. We never think that they are our opposite party or enemy. They are one of our operators and as a regulator, we tried to provide them with all the services they deserved," he said.

Jahurul said the BTRC did not want to be benefitted by keeping Grameenphone's money.

"It is the government's money and we are doing our duty that we are supposed to do.

"In the future, we will discuss Grameenphone's problems. As a regulator, we will provide them with all the required services," the BTRC chairman added.

Grameenphone's Hossain Sadat said his company respects the legal system of Bangladesh.

He said Grameenphone had made an adjustable deposit of Tk1,000 crore to the BTRC without prejudice following the Appellate Division's order.

"Grameenphone reiterates that it disputes the validity of the BTRC audit claim, and this deposit should not be seen as the admission of liability. It is our ambition to resolve the audit dispute either through an amicable and transparent solution or in court," said Sadat.

Among others, BTRC commissioners Subrata Roy Maitra and Md Aminul Hassan were present at the programme.

On Friday, Grameenphone decided to deposit the money to the BTRC following the order of the Appellate Division on the company's review petition.

How the dispute began

Grameenphone share prices began to fall from its historic high of above Tk500 two years ago and dropped below Tk230 in January this year amid an intensified dispute with the BTRC and the National Board of Revenue.

In April 2019, the BTRC demanded that GP pay an unpaid audit claim of Tk12,580 crore. The company refused to pay the money and also questioned the BTRC's audit process.

According to the audit claims, Grameenphone owes the BTRC Tk8,494 crore and the National Board of Revenue Tk4,086 crore. Of the BTRC's total claim, the principal amount was Tk2,300 crore and the rest was interest.

In July last year, the telecom regulator stopped issuing no objection certificates to Grameenphone which are required for importing network expansion equipment. It also barred the company from offering new service packages and importing new SIM cards until the clearance of the audit claim.

A few weeks later, the BTRC also attempted to appoint an administrator in the company, which is believed to be a punishing disruption in the business operation.

Grameenphone moved to the lower court, seeking a temporary injunction on the BTRC's claim but did not get it. The company then submitted the same petition to the High Court.

In October, a High Court bench issued a two-month injunction on the BTRC's claim.

Later, the BTRC appealed to the Appellate Division, seeking a stay order on the injunction. The appeal was granted.

Three months ago, the Appellate Division ordered Grameenphone to pay Tk2,000 crore to the BTRC and remain under the legal process.

Following hearings and petitions submitted by Grameenphone, the company was ordered to pay Tk1,000 crore and appear before the Appellate Division on Monday (today) for the final hearing and order on the stay order.

Investors are now waiting to know what will happen in the Appellate Division.