Chairman PTA in trouble as Cabinet Division gets report
Abdul Sattar Khan
LAHORE: Adopting the same course of action as taken by Dr Mohammad Yaseen, Chairman Pakistan Telecommunication Authority (PTA) against him, the suspended Member (Finance) PTA Syed Nasrul Karim Ghaznavi has now also filed a detailed report with the Secretary Cabinet Division, Nargis Sethi, holding Chairman PTA responsible for losses running into billion of rupees.
Member (Finance) PTA has also requested the secretary Cabinet Division to refer this case to Federal Public Service Commission (FPSC) for an independent probe.
In his voluminous report carrying hundreds of pages attached with the letter on the official letterhead pad of PTA, N K Ghaznavi, who was one of the components of the authority before his suspension, also alleged that many decisions of crucial nature were carried out without the approval of the authority.
The chairman PTA, in his response to The News said: “These points have been raised with the Cabinet Division by the suspended member (finance) PTA and are mere allegations. Member (Finance) is trying to implicate the chairman PTA in a blame game since his suspension on various charges for which an inquiry is under process. The points being referred belong to the time period when the incumbent chairman PTA was working as member technical along with member finance as members of the Authority.”
“All regulatory decisions were taken by the Authority and not be any single member of the Authority. PTA has just received copy of these points from the Cabinet Division and detailed replies on all these points along with documentary evidence would be sent to Cabinet Division within due course of time as these points relate to quite old cases and need going through host of data”.
The report, however, says that M/s Callmate Telips Telecom Ltd, once engaged in the business of provision of telecommunication services, defaulted in payment of PTA’s dues against which PTA made various requests to the licensee but in vain. Following its failure to recover the total outstanding dues, the PTA issued determination of the license on October 27, 2008 due to non-payment.
However, the letter of enforcement of determination was purposely delayed and was delivered on March 18, 2009 allowing sufficient time to the company to continue to earn and then run away with the money. Moreover, while all these issues of default money were pending, the company applied for change of management. After reviewing the case, the Director (Wireline Licensing) PTA stated that the licence stood cancelled therefore the management could only be approved after the reinstatement of the licence through a court order.
Similarly, Member (finance) also advised to re-examine the case in the light of remarks of the Director (Wireline Licensing) and marked the file to DG (Licensing). Without sending back file to the Member (Finance), the chairman PTA while acting then as Member (Technical), approved the change of management by misstating the fact that this was approved by the authority, though the license of the company stood terminated. The total default of the company stood at Rs410 million as of May 2010. The change in the management was allowed despite the fact that the said company remained non-compliant on account of providing essential documents, which also includes business plan covering its financial strength, technical plan and schedule of payments to PTA.
Since the said company was in bad shape, many banks had filed recovery claims and the matter had also gone into the hands of NAB but the PTA, under mysterious circumstances, moved very late to recover its outstanding amount from the said company. In the given case, the report says, PTA will only get its dues when the payments of the banks have been made as the banks now have preferential right. Which means this money is lost forever because M/s Callmate does not hold many assets to pay all its outstanding dues. Moreover, by giving clearance of management change the PTA has also lost its claim on the assets of the company. It is worth mentioning that the official liquidator, appointed by the court, had made payments to Bank Al-Falah and Bank of Punjab after auctioning a piece of land owned by M/s Callmate Talips while the PTA is still struggling hard through its law division to pursue the case in the court for speedy liquidation.
Similarly, DV Com (Pvt) Limited, which was awarded Long Distance International (LDI) and Wireless Local Loop (WLL) licences, started LDI services but did not launch WLL services. A few years back DV Com Limited approached the PTA with a request for the split of its WLL licence into DV Com LDI (Pvt) Ltd for LDI Service; DV Com WiMax (Pvt) Ltd for WLL licence with 3.4 GHZ band in 10 regions; DV Com WLL (Pvt) Ltd for WLL services with 450 MHZ band in 11 regions; DV Com Data (Pvt) Ltd for WLL Services with 1900 MHZ band in 9 regions.
The then Member (Technical) PTA and now the Chairman PTA Dr Mohammad Yasin, recommended approval of this split against the advice given by member (finance) which was based on the independent legal opinion given by M/s Kundi and Kundi. The legal opinion says: “There is no doubt that it is only the PTA, which can approve the transfer of licence and that the licences issued by PTA are specific, personal and non-transferable so that discretion is to be used with care and sparingly and only in deserving cases. We have emphasised time and again that spectrum is a priced and scare commodity which if not used for licence conditions must revert to PTA for further action and allocation. PTA in the past has given extension of one year to WLL licencees to comply with the roll out and other conditions. The licencees accepted the first extension as a good grace to facilitate to expand broadband tele-density in the country, whereas the second extension has been perceived as a favour to non-compliant operators who have not rolled out their sites.”
This split was allowed in total disregard of para 4.4 of the de-regulation policy and licence conditions given in para 5.2.1. (b). This was done despite the ban imposed on grant of new licence for 7 years with effect from March 2006.
In addition DV Com Data has an outstanding Annual Radio Frequency Spectrum Fee (ARFSF) of Rs21.672 million till Jan 2011 while another amount of Rs1.5 billion is also outstanding against DV Com Data. Likewise DV Com WLL has not submitted their AAAs till now and they are in default of Rs35.589 million up to June 2010.
Another charge, which also forms part of this report, relates to the issuance of Approved Settlement Rates (ASR) Access Promotion Contribution (APC) without the approval of the authority resulting in the menace of Gray Trafficking causes loss of billions of rupees to government. ASR and APC are reviewed continuously by the authority as per provisions of the deregulation policy, APC rules 2004 and Telecommunication Act 1996.
Before issuing revised rates usually on six monthly bases, detailed in-house analysis is carried out and then findings of this analysis are shared with all Long Distance International (LDI) operators and their views and comments are invited. Based on the feedback of the LDI operators and analysis carried out by PTA, the ASR/APC rates are determined with the written approval of the authority. In total disregard of this standard practice Chairman PTA Dr Mohammad Yasin increased the rates in connivance with the DG (Commercial Affairs) without the written approval of the authority. In this regard the report says that without issuing meeting minutes, the ASR/APC was revised upward from US$0.10 per minute to US$ 0.125 per minute against the wishes of the majority of stakeholders who wanted lowering of the rates to US$0.75. No approval was taken though in the letter it is misstated that it was approved by the authority.
This increase in ASR/APC rates from US$ 0.10 per minute to US$ 0.125 per minute without approval of the authority unleashed floodgates of grey traffic, which is now hard to control, the report says.
It is contended that if ASR/APC were reduced to US$ 0.75 the grey trafficking would have decreased significantly. Chairman PTA’s single-handed action of increasing it is now causing loss of billions to national kitty and the International Telephony is now touching around 500 million minutes per month and as per some estimates around 30-40% minutes per month are engulfed by grey traffic which means around US$15 to $20 million are lost every month, as this traffic is not passing through normal channels. In addition default on account of APC for Universal Service Fund (USF) is increasing by 10 to 12 billion rupees every year.
Abdul Sattar, Chief Accountant DV COM claimed in an email response to The News: “We bought DV Com from previous management and we paid handsome amount to the previous owner including past overdue liabilities and had even paid Rs120 million more on account of APC of past period and we have already made a claim for adjustment from PTA.
In addition we have paid more than Rs300 million APC for USF contribution. We were shown NOC of PTA regarding transfer of LDI licence to new company at the time of purchase. At this moment, if some one claims that the said transfer of licence is illegal then it is tantamount to serious fraud with buyer/investor, whoever committed this”.
Source: The News
Date:5/21/2011
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