The Financial Express

Regulator shouldn't overreact

Regulator shouldn't overreact

The dispute between the country's two leading telecom operators---the Grameenphone and the Robi--- and  the sector regulator over unpaid 'audit-claims' has lately turned nastier.

The government in an unprecedented move decided to appoint administrators for both the telecom companies when a few government leaders were talking about out-of-court settlement of the dispute over audit claims worth over Tk 134 billion. 

The Bangladesh Energy Regulatory Commission (BERC) has been claiming the amount following two separate audits carried out by it in 2016.

Until recently both sides were engaged in war of words and court battles. But the move to push government administrators has added a new dimension to the dispute.

As expected, the foreign investors in Bangladesh did not like the idea of appointing administrators. The Foreign Investors' Chambers of Commerce and Industry (FICCI), according to a media report, has expressed its deep concern over the issue as the move would set 'bad' precedence for future foreign investors in Bangladesh.

What the government, actually, wants to achieve through its move is not clear. By making appointment of administrators it is unlikely to help it realise the 'disputed' money since its claim has been challenged in the court of law.

 A High Court bench on October 17 issued an ad-interim injunction for a period of two months restraining the government from realising its claimed dues from the GP. 

The FICCI has not said anything about the disputed audit claims and the legal battle. What, it seems, has stirred up worries among the FICCI members is the appointment of administrators for running the affairs of the telecom operators.

The central bank in extreme cases does appoint observers/administrators in troubled banks or financial institutions. But there is no precedence of appointing administrators in foreign companies operating in Bangladesh by the government.

Then again, the GP is a public limited company. It is not clear whether appointment of an administrator by the government can be made without securing the consent of its shareholders. Moreover, the companies law allows the government to appoint administrators/ liquidators only in companies that face liquidation or are in the process of winding up.

The concern expressed by the foreign investors in Bangladesh over the likely appointment of administrators for GP and Robi does deserve attention of the appropriate authorities of the government.

The global association of mobile operators, reportedly, has also expressed its grave concern over the government's move.

The moot issue of dispute here is certain amount of revenue that two telecom operators, allegedly, did not pay to the government. In the case of GP, the amount was  about Tk 23 billion and Robi Tk 3.19 billion. But the BTRC claimed nearly Tk 126 billion from GP and Tk 8.67 billion from Robi adding fines for delaying the payment.

The telecom operators, as part of the efforts to settle the dispute outside the court recently received a proposal to pay the principal dues, prior to holding discussion on the issue. But the operators say that the principal dues, as claimed by the BTRC, are not undisputed.

Meanwhile, the High Court bench on October 17 last issued an ad-interim injunction on the realisation of the amount, as claimed by the BTRC, from GP for two months.

Certainly, the HC bench might have found certain merit in the GP's plea and issued the ad-interim injunction.

It is, however, clear that the telecom operators in question did fail to pay their dues, whatever their amount, to the government. That was not fair on their part also.

What finally comes out of the court cases will certainly be important for the parties involved in the dispute. But the government does need to think of implications of its actions. It should not do anything that gives rise to worries among the investors --foreign or local.





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