Both telecom operators claimed that taking away the right to arbitration was unfair to foreign investors
Telecom operators Grameenphone and Robi have termed starting a dispute based on audit of 20 years of activities as an unprecedented move by the Bangladesh Telecommunication Regulatory Commission (BTRC).
Both operators added that taking away their right to arbitration is also unfair treatment towards foreign investors.
Disputes among business entities is common worldwide and arbitration is the global principle to mediate such disputes, said top officials of both telecom companies.
Yasir Azman, deputy CEO and Chief Marketing Officer of Grameenphone Limited, and Mahtab Uddin Ahmed, CEO of Robi Axiata Limited, voiced their disappointment at a talk show titled "To the Point," hosted by private television station Channel I on Sunday night.
They said that claiming dues after conducting an audit on 20 years of activities has never happened before.
Questioning the overall audit process, they said their opinion had not been sought by the Bangladesh Telecommunication Regulatory Commission (BTRC) and they were deprived of an opportunity to resolve the issue through discussion.
Regarding the dues, Yasir Azman said, "Of the total Tk12,579 crores, over Tk4,000 crores demanded by the BTRC is impractical. There were some miscalculations while determining the principal amount too."
He said that Grameenphone is a responsible company as it has been paying all taxes according to guidelines set by the National Board of Revenue (NBR).
Robi CEO Mahtab said that for every audit, the audited firm has a scope to answer questions regarding the audit before it is submitted to the relevant authorities. However, neither operators were given this opportunity following this audit.
"The auditor directly submitted the report to the BTRC, which was really strange. But once the report was on BTRC's table, we had several discussions on the issue. However, our opinions were disregarded," Mahtab added.
The Robi CEO further said they had been trying to resolve the dispute through arbitration for a long time, but the telecom regulator did not reciprocate.
"We are disappointed with everything. I think is unfair to deprive foreign investors of their right to arbitration," he added.
However, the BTRC authorities denied the allegation, claiming both companies had been given enough time to resolve the issue.
"Wanting dues from someone cannot be unfair. We called them up repeatedly to discuss the issue, and to deposit the money, but they did not respond," said Post and Telecommunication Minister Mustafa Jabbar.
Since the issue has now been taken to court, we will wait for the verdict, he added.
The telecom operators and the regulator locked horns on April 2 this year, when the BTRC demanded Tk12,579.95 crores from Grameenphone and Tk867.24 crores from Robi, in back taxes going as far back as 20 years.
On October 17, the High Court issued a two-month injunction against the BTRC move to realise the money. Later, the BTRC appealed to the Appellate Division of the Supreme Court, seeking a stay order on the High Court injunction.
The Appellate Division on October 24 asked Grameenphone to inform it about how much money it could pay the BTRC at the moment, and granted a two-week period to the operator on October 31 for a response.
On November 14, Grameenphone said that they would pay Tk200 crores to the Bangladesh Telecommunication Regulatory Commission.
"We were pressured to pay the Tk200 crores and we agreed to pay it as a gesture of goodwill. The amount would be deducted to the dues after the dispute is resolved," said the Grameenphone deputy CEO.
Robi CEO Mahtab argued that claiming money before settling a dispute is not in accordance with any laws, including the BTRC's own regulations.
"It will be misleading to say that we agreed to deposit the money. Rather, we were made to agree."
Regarding BTRC refraining from issuing no objection certificates (NOCs) for importing equipment, Yasir Azman said, "Equipment worth about Tk480 crores could not be imported as BTRC refused to issue NOCs for them.
Duties from this investment will not go to the government exchequer."
Both representatives said other partners and customers were being affected by this situation. They said this would lead to more direct and indirect impacts on the economy.
The Robi CEO said that telecom operation is not a sustainable business in Bangladesh.
"We are dealing with expensive raw materials, high taxes and the lowest rates for the product. This combination is very tough to profit from."
However, both operators still believe that there is a scope to reach an amicable settlement through discussions.