Kneeling Telecom, the Auditor’s Report indicates that it is ready to be locked
The National Audit Office has raised the alarm that the Public Enterprise “Telecom of Kosovo” may be locked, reports Express.
According to the Auditor General, Telecom has many uncertainties and is not sure whether it will meet its financial obligations and continue its operational activities.
“All the issues listed above are an indication that the company has many uncertainties with the principle of continuity, respectively it is not certain whether I can meet these obligations and continue its operational activities,” said in the Auditor’s report. ./Express
Below are the points on which the Auditor is based for this conclusion:
(a) The Court of Appeals, by its decision of 07.02.2022, approved the appeal of Telecom of Kosovo, annulling the decision of the Basic Court in Prishtina, by which the decision of the International Court of Arbitration (ICJ) of 09.12 was declared enforceable. 2016 that obliged Telecom of Kosovo JSC to pay compensation to Dardafon in the amount of € 31,178,920. Among other things, Telecom had requested the imposition of a temporary security measure for the suspension of execution, but the court had not decided on this request, stating that it is up to the court of first instance to decide on the proposal in question. The first instance court had not yet scheduled the retrial hearing by the time we were in the audit process. By the end of 2021 the remaining debt to Dardafon based on the decision of GJNA was € 8,808,128.
(b) Dardafon, in 2019, had initiated a second arbitration against the enterprise. The value of the claim according to Dardafon was around € 50,000,000 and refers to the non-extension of the Basic Agreement for the Mobile Virtual Network Operator (ORMV) and the non-provision of some services during the period of the Agreement. Based on this, the Arbitration Court on 18.02.2022 had decided in favor of Dardafon and the debt that Telecom of Kosovo has to pay according to this decision is € 13,466,089 including penalty interest. This further aggravates the difficult financial situation of the Enterprise, where the net cash flow continues to be negative for 2022.
(c) Liabilities to TAK at the end of the year amounted to € 12,727,748.
(d) The main business activity of the enterprise is based on information technology. The condition of telecommunication platforms and systems continues to be dire. For most systems there are no active maintenance / technical support contracts from the manufacturer. According to company officials’ estimates, the necessary investment projects amount to 19m euros.
(e) The Enterprise has incurred a loss for the year ended 31 December 2021 in the amount of € 10,829,000. (2020: € 18,727,000. The Enterprise has continued the trend of operating at a loss for seven (7) consecutive years and the accumulated losses up to 31 December 2021 are worth € 76,264,000. In addition, as at 31 December 2021 current liabilities exceed current assets for the amount of € 52,605,000 (2020: € 66,233,000).
(f) The key financial indicators calculated in the 2021 financial statements figures are negative.
All the issues listed above are indicative that the company has many uncertainties with the principle of continuity, respectively it is not certain whether I can meet these obligations and continue its operational activities.