High Court injunction halts payment of Grameenphone dues

The High Court on Thursday imposed a two-month injunction, barring the Bangladesh Telecommunication Regulatory Commission from collecting dues amounting to Tk12,579 crore from mobile phone operator Grameenphone.

The telecom regulator was planning to take the final decision for appointing administrators at two major mobile phone operators – Grameenphone and Robi – after receiving approval from the ministry concerned.

But it seems that the court injunction has derailed the commission's initiatives regarding the appointment and its plans for collecting long-standing dues.

The High Court bench of justices AKM Abdul Hakim and Fatima Nazib passed the order after accepting an appeal plea filed by Grameenphone.

The telecom company filed the appeal challenging a lower court order that rejected its application seeking a directive on the regulatory body, asking it to refrain from collecting dues from Grameenphone and halt any harassment until the case is disposed of.

The bench also set November 5 for hearing the appeal filed by Grameenphone.

On April 2 this year, the Bangladesh Telecommunication Regulatory Commission demanded Tk12,579.95 crore from Grameenphone over irregularities in 27 items, prompting the telecom company to file the appeal.

Advocates Dr Sharif Bhuiyan, AM Aminuddin and barrister Tanim Hussain Shawon represented Grameenphone, while barrister Khandaker Reza-E-Raquib stood for the regulatory commission.

"The court issued a two-month injunction on the commission's claim against Grameenphone for dues amounting Tk12,580 crore. Therefore, the money will not be disbursed at this time," said advocate Aminuddin.

After several failed initiatives, the Ministry of Posts, Telecommunications and Information Technology cleared a proposal of the Bangladesh Telecommunication Regulatory Commission to appoint an administrator to this operator along with Robi.

"We are not fighting a war with the telecom operators, we just want payment of the dues based on an audit claim," ICT Minister Mustafa Jabbar told The Business Standard.

Meanwhile, a senior official of the regulatory body said, "We have yet to receive a copy of the High Court order. We will take necessary action with due respect to the order."

When asked about Robi and the payment of its dues, the official did not make any statement.

How did commission come up with the claim?

As per regulations, all mobile phone operators must pay a 15 percent Value Added Tax. However, Robi and Grameenphone reportedly did not pay the right amount to the government exchequer.

The telecom companies are also facing allegations of tax evasion.

According to sources from the Bangladesh Telecommunication Regulatory Commission, both the operators paid less VAT against their source of income and misused the tax rebate facility.

In July last year, the commission claimed in an audit report that Robi must pay Tk867.24 crore in unpaid dues. Later in April, the commission in another audit report claimed that Grameenphone must pay Tk12,579 crore in dues.

The net amount of Grameenphone dues is Tk7,444 crore, while Tk4,085 more was added as VAT and tax. 

On the other hand, the net dues against Robi are Tk677 crore, but it went up at Tk867.24 crore after the addition of Tk189.47 crore as VAT and tax. 

Telecom operators raise question

Grameenphone and Robi have been questioning the commission's claim from the very beginning, claiming that it was the regulatory body's duty to conduct annual audits regularly, which it did not do. 

In 2011, when the commission claimed Tk3,034 crore based on an audit report, Grameenphone denied the claim and filed a case with a Dhaka court. The court then directed the regulatory commission to conduct a fresh audit. 

However, despite conducting new audits, both operators denied paying the outstanding dues.

On July 4, the commission directed all International Internet Gateway operators to slash 30 percent of Grameenphone's total bandwidth usage and 15 percent of Robi's in an attempt to collect the unpaid dues.

Later, the commission backtracked on the decision considering customers' inconvenience and planned to appoint administrators at Grameenphone and Robi.

Opposing the regulatory body's initiatives, Robi and Grameenphone filed separate cases with the Dhaka district court on August 27 and 28.

The dispute reached a climax on September 5, when the commission issued notices to the top two leading mobile operators of Bangladesh, asking them why their 2G and 3G licences should not be cancelled in the next 30 days for their failure to pay due taxes.

In a dramatic move on September 18, Finance Minister AHM Mostafa Kamal got involved with the debacle and tried to resolve the issue through discussion.

Grameenphone and Robi were supposed to pay Tk100 crore and Tk50 crore respectively to the commission within seven days of that meeting. However, the companies reportedly made no payments whatsoever.

No further progress was witnessed in this regard.

Statements from Grameenphone, Robi

Issuing a statement on Thursday, Grameenphone's Head of Regulatory and Acting Head of Communications Hossain Sadat said, "We would like to reaffirm our commitment to reaching a transparent and amicable resolution to the disputed BTRC audit claim through a constructive dialogue.

"The Hon'ble High Court Division has passed a stay order restraining BTRC from taking any steps towards realization or enforcement of the Audit Demand that was sent to Grameenphone."

The statement further read, "The Hon'ble Court also stayed operation of the BTRC letter related to suspension of NOC (No Objection Certificate) for importation of equipment/software and suspension of tariff/service package approvals."

Meanwhile, Robi Axiata Ltd's Chief Corporate and Regulatory Officer Shahed Alam in a statement said, "We have not yet received any formal notification regarding the appointment of an administrator, therefore, it would be premature to reflect on it.

"However, we would like to reiterate that a case is currently pending before a competent court of law. In this backdrop, appointment of an administrator can only be deemed as unlawful since the matter is subject to adjudication in the court."

Shahed Alam added, "In view of the illegality of appointment of an administrator to realize an audit claim that is fundamentally flawed, we believe that the Government would rethink such an unlawful option before the court arrives at a decision on the matter."