Editorial – April 2024

Our investigative cover story exposes how BSNL is allowing a private company, NxtGen Datacenter & Cloud Technologies Pvt Ltd to defraud it of revenue through klepto means. Despite red flags by several audit committees and calls for expert forensic audits, BSNL top management is keen to pull curtains down on this fraud with a recovery of Rs 1.29 crore towards the payment of revenue share and interest of Rs 21.34 lakh interest.

So, what are the core features of this revenue stealing operation and how was it conducted? The matter pertains to BSNL’s Internet Data Centre (IDC) business. The revenue share was 20 per cent for BSNL and 80 per cent for Data Centre Service Providers. NxtGen operates the IDC sites at Mumbai, Ahmedabad and Faridabad. The modus operandi for enacting this fraud was subterfuge on regular basis. In violation of the tender condition, it started receiving orders directly in its own name. By doing this, it inflicted a double whammy on BSNL – it did not disclose the customer to BSNL and resultantly did not pay revenue share on majority (about 90 per cent) of the order value to BSNL. The company carried out customer enabling/ disabling remotely from their Bengaluru office. BSNL was kept in the dark about the actual position of customers working from BSNL IDCs.

We bring to you in detail the fraud estimates, audit trail from different locations, responses of the entities involved – all of which firmly validate that BSNL’s infra was operated by stealth by NxtGen, information of revenue share was hidden while acquiring customers thus enabling the private entity to rob BSNL of revenue share on order values. Notwithstanding this, BSNL shut out the audit findings and continued to award plum tenders to NextGen such as Election Commission of India’s (ECI) Cloud Services contract.