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Allegations timed to scare bankers and investors, says Fastway MD Gurdeep Singh
MUMBAI: Fastway Transmission, a dominant multi-system operator (MSO) in Punjab, is trying to raise capital and the latest allegations against it are a move to scare bankers and investors, the company’s managing director Gurdeep Singh has said.
The MSO has been accused by Punjab local bodies minister Navjot Singh Sidhu of indulging in monopolistic practices and evading taxes based on its proximity to the erstwhile ruling political Badal family. Sidhu has alleged that Fastway owes Rs 684 crore to the government and has sent the company recovery notices.
However, Fastway Transmission MD Gurdeep Singh in an interview to Hindustan Times has denied the allegation, saying that the company’s accounts are being audited by Ernst & Young. Singh also argued that the company will have difficulty raising loans if it does not pay taxes.
“A reputed company like Ernst & Young audits our accounts. Are we so naive that we will evade all state and central taxes? How will we apply for loans then? How will we raise funds through an IPO (initial public offer)? This negative publicity is timed to scare bankers and investors as we are trying to raise capital from the open market,” Singh has been quoted by the daily as saying.
While stating that Fastway has deposited entertainment tax, he also added that the service tax liability is that of the local cable operator (LCO).
“As for service tax, it is the individual liability of the cable operator to deposit it. We have deposited entertainment tax and charges for laying our cable or using electricity poles for overhead cables. We have spread our cable business to many states. Do we enjoy political patronage everywhere?” he added.
Fastway Transmission has steadily expanded into other North Indian states including Himachal Pradesh, Rajasthan and Uttarakhand.
Singh also noted that presently 5,290 cable operators are associated with the MSO in Punjab and 159 in Chandigarh. Each LCO has 100 to 500 connections.
On the allegation of under-declaration of cable TV subscribers, Singh explained that, while Fastway has roughly 24.5 lakh subscribers, it had to procure 45 lakh set-top boxes (STBs) since it has entered other cable television markets like UP, Himachal Pradesh, J&K, Rajasthan, Uttarakhand and Haryana.
“So, the set-top boxes were not just meant for Punjab. Around 1.5 lakh of those are lying in our godown and another 1.5 lakh are lying damaged. Our connections in Punjab and Chandigarh are 24.5 lakh, of an all-India total of 42 lakh, of which 34 lakh are active,” he pointed out.
Singh also revealed that Fastway’s turnover is over Rs 500 crore now. “We have expanded both the scale and area of our business. We have digitised the cable network business and ventured into the internet market too,” he stated.
He also said that the MSO receives all payments through cheques and that there are no cash transactions.
Meanwhile, Punjab chief minister Captain Amarinder Singh has ruled out any censorship against “Fastway/PTC News or any other cable or media organisation”. In a public statement, he has said that “action would be taken only if tax evasion is found true”.