Business Today – August 25, 2019

PARLIAMENT

Working

Session

RELATED PARTY transactions or

RPTs, a term that has always

been associated with corporate

governance or lack of it, are not

the cuss words in corporate world

neither do they always insinuate

corruption. However, they end up

being at the centre of some or

other controversy.

At the heart of the fight be-

tween co-founders of the IndiGo

airlines are certain questionable

RPTs. Rakesh Gangwal, one of the

co-founders, said that the airline

entered into RPTs associated with

the other co-founder Rahul Bhatia.

Bhatia refutes these charges

by saying that all RPTs were in ac-

cordance with the law and less than

one per cent of the total turnover of

the company.

As the name suggests, RPTs of

a company are with those enti-

ties that are in some way associ-

ated with it – either subsidiaries or

entities associated with directors,

senior executives or their relatives.

There are stipulated norms for

any transactions with such entities.

All transactions have to be

done at an arm’s length pricing and

disclosed properly.

Yet these are transactions

through which many corporate

frauds are committed, and though

they are not illegal, RPTs are always

under scrutiny.-Dipak Mondal

IN A RECENT affidavit filed in the Su-

preme Court, the Department of Tele-

communications (DoT) has pegged

dues from telcos at `92,642 crore on

account of licence fee and spectrum

usage charges (SUC). Airtel owes the

most, followed by Vodafone and bank-

rupt Reliance Communications. For

nearly 16 years, DoT and telcos were

at loggerheads as they differed on the

adjusted gross revenue (AGR) calcula-

tions. Telcos pay licence fee and SUC

to DoT as a percentage of their AGR.

DoT says this includes a wider range of

components such as interest income,

dividend, profits on sale of assets, in-

surance claim, and forex gain. Telcos

say these are non-telecom revenues

and should be excluded. In a 2006

judgement, telecom tribunal TDSAT

termed inclusion of non-telecom rev-

enues by DoT as illegal. The final order

on the issue is expected in two-three

months. Since telcos, already facing

heightened competition, are not pro-

visioning for this dispute, they might

be in for a rude shock if the DoT

has its way.-Manu Kaushik

Under the

Scanner

RPT

IN A WELCOME change, the first ses-

sion of the 17th Lok Sabha appears to

be the most productive in the last two

decades. While 35 Bills were tabled;

16 are now law and 12 were passed by

the lower house. There were no cases

of MPs rushing to the well and no vo-

ciferous walkouts. The session com-

menced on June 17, but was extended

to August 7.

Apart from amending the exist-

ing laws governing Aadhaar identity,

Right to Information, compulsory CSR

for corporates, the Parliament also

gave teeth to National Investigation

Agency and overhauled the Motor

Vehicles Act. The session passed the

contentious Muslim Women (Protec-

tion of Rights on Marriage) Bill, 2019,

not only making triple talaq illegal,

but also a criminal offence.

The criticism has been that since

NDA is nearing a simple majority in

Rajya Sabha, and has comfortable re-

lations with many opposition parties,

it is bulldozing through the bills.

-Anilesh S. Mahajan

AGR

Rising Dues