The government has started the process of appointing administrators for Grameenphone and Robi to run the businesses, an unprecedented move in Bangladesh.
Multiple sources familiar with the development said the decision, which comes from the highest authorities of the government, was aimed at recovering Tk 13,447 crore the companies, according to the telecom regulator, owed the government.
The amount was determined through two separate audits by the Bangladesh Telecommunication Regulatory Commission in 2016.
The BTRC on Tuesday sent two letters to the telecom ministry for its approval to appoint the administrators.
The letters proposed appointing at least four administrators in each of the carriers.
“We have the telecom regulator’s recommendation and will go for it as the highest authorities of the government directed us to take prompt action,” Mustafa Jabbar, post and telecommunication minister, told The Daily Star yesterday evening.
The formal approval will be issued today, Jabbar said.
“I have verbally directed the BTRC to prepare and find people suitable for the post of administrators.”
He added that such a move was unprecedented in Bangladesh.
Top officials of the telecom division also said the telecom regulator and the ministry moved forward with the consent of the government.
On September 5, the BTRC issued two notices to Grameenphone and Robi asking why their 2G and 3G licences should not be revoked for their failure to pay the dues.
In their replies, the carriers this month claimed that the BTRC notices were invalid as the audit-claim was a subjudice matter.
BTRC Chairman Jahirul Haque yesterday said the carriers’ replies were not satisfactory and the commission had decided to suspend their 2G and 3G licences before appointing the administrators to run the businesses.
However, the 2G and 3G services will continue.
Meanwhile, Finance Minister AHM Mustafa Kamal last month stepped in as mediator and announced that he would start a negotiation with the carriers and the regulator to settle the issue amicably. A proposal to form two neutral committees to revise the audit findings was placed in a meeting on October 3.
After that meeting, the carriers received a separate proposal through emails to pay immediately their principal dues (excluding the fines for delaying the payment) which were undisputed. But in response, the operators said the principal amount was not undisputed. They said they had not received any reply after that.
The telecom regulator has run a long auditing process and in 2016, it claimed that Grameenphone owed it Tk 12,579.95 crore and Robi Tk 867.23 crore for dodging revenue share, taxes and late fees accumulated until December 2014.
Of the total, the principal amount for Grameenphone is Tk 2,299.71 crore and Robi’s Tk 319 crore, according to the BTRC.
The telecom minister yesterday hinted that the BTRC would appoint the administrators by this month. The officials would remain at Grameenphone and Robi until the dues were realised.
Of the four administrators in each of the companies, one would act as chief executive officer. The three others would be legal, engineering, and finance and marketing experts, BTRC Chairman Haque told The Daily Star yesterday.
“Our main target is to realise public money. To get that money, the team [of administrators] will be the real authorities of the companies,” he said.
Spokespersons of both the companies said the government would face “serious consequences” if the decision was implemented.
Since Grameenphone and Robi’s parent companies Telenor and Axiatia have large government investment in Norway and Malaysia, it will become a government-to-government issue as soon as the appointments take place, said a top executive of a carrier, requesting not to be named.
“Our group has already instructed us to observe the government move. we’ll react soon and the consequence will be very tough,” the official said.
Grameenphone and Robi in late August filed cases challenging the audit claims.
Barrister Tanjib-ul Alam, an expert in company laws, who is representing Robi in the case, said the government could appoint an administrator only when a company winds up.
“Appointing receivers [administrators] at Grameenphone and Robi will be unlawful as they have filed court cases on the issue,” said Tanjib.
Both carriers, however, said they were yet to receive any notification from the BTRC.
“We have not yet received any formal notification regarding the appointment … However, we would like to reiterate that a case is pending before a competent court of law,” said Shahed Alam, chief corporate and regulatory officer at Robi.
He said the appointment of administrators would go down as the darkest chapter in the history of telecom industry.
“Needless to say, it will irreparably damage the country’s image as a safe haven for foreign investment,” Shahed said in an email.
Hossain Sadat, acting head of communications at Grameenphone, said,
“We will not engage in any speculation as we have not received any such information from the BTRC.
“Our priority remains in finding a transparent, amicable, and timely solution. However, we have recently received a new set of directives from the government that may prolong the dispute. Regrettably, the unfounded restrictions and the show-cause notice by BTRC on Grameenphone are still in place, preventing us from normalising our business operations and are affecting our customer experience.”
In July, the BTRC slashed Grameenphone’s bandwidth by 30 percent and Robi’s by 15 percent for failing to pay the dues.
But the block on bandwidth was lifted after two weeks, considering the inconvenience it was causing the subscribers.
On July 22, the government also decided not to allow the companies to roll out new packages or services, or import network equipment. The restrictions will be withdrawn after the administrators take office, Jabbar said.