Now RCOM found with accounting irregularities should you be concerned ?

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About rahul das

Author is Investment strategist at top 5 broking firm based in Mumbai.

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SEBI has shown interest in reviewing the findings of a government-appointed audit firm regardign irregularities by Reliance Communications Ltd (RCom).

It all started when TRAI found that RCOM is saving licensing money by under reporting revenue.

A senior Sebi official said the market regulator would “definitely have to look into the matter” in such cases, but could not say if the process of internal examination had started or would start sometime soon.

The report alleged RCom had under-reported revenue to save on licence fees and inflated numbers to the stock exchanges.

RCom, with 84.11 million users, offers services on both GSM (global system for mobile) and CDMA (code division multiple access) technologies. The firm had refuted the findings in an emailed statement on Monday, accusing the auditor of bias and acting at the behest of corporate rivals.

“Financial irregularities, even when they are merely alleged, unnerve investors and that applies to all the listed firms of Adag,” added the analyst who, while declining to be named because his company policy doesn’t allow direct media interaction, pointed to the drop in share prices of other R-Adag firms.

Other ADAG companies ..

 Reliance Capital Ltd , Reliance Infrastructure Ltd , Reliance Power Ltd all ended in red today .

 

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