The Telegraph
Saturday , July 19 , 2014
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Set-top box fraud slur on MSO

Two lakh set-top boxes subscribers returned to their cable operators last year after switching multi-system operators had disappeared, according to a police complaint that claimed a loss of Rs 35 crore.

At least two men, a cable operator and an official of MSO Hathway, have been arrested following the complaint lodged by MSO Digi Cable Comm. The main accused, Digi Cable’s former CEO Amit Nag, who moved to Hathway in January 2013, is absconding.

The police carried out raids in the first week of July and recovered 1,91,000 boxes. Digi Cable will soon move court to get the boxes back.

Digi Cable has lodged a similar complaint in Mumbai, alleging that Hathway had not returned 80,000 of its set-top boxes. Around 8,000 of the boxes have since been recovered and two cable operators arrested.

In Calcutta, the subscribers who made the switch were not affected as they have been able to enjoy cable service through Hathway set-top boxes.

“The main focus was on the recovery of the boxes and that has been done. Investigations are still on,” said Pallab Kanti Ghosh, joint commissioner of police, crime.

The FIR lodged in Calcutta carries charges under nine sections of the IPC, including those dealing with fraud, misappropriation of funds, cheating and theft.

Cable industry sources said Nag had convinced 412 of the 600 cable operators affiliated to Digi Cable to switch to Hathway along with him. As is the practice, the cable operators who switched MSOs deposited the Digi Cable boxes to Hathway.

Instead of returning the boxes to Digi Cable, Hathway allegedly kept most of the boxes in a godown near Rajabazar science college. The boxes in the godown have been seized.

According to the Telecom Regulatory Authority of India guidelines, if a cable operator wants to switch MSOs, they have to give a notice of 21 days as well as return the set-top boxes to the old MSO and then enter into a fresh agreement with the new MSO.

“The practice for cable operators switching MSOs is to return the old boxes to the new company, which then returns them to the MSO that owns them. In this case that did not happen,” said a cable industry insider.

Set-top boxes are properties of the respective MSOs and are given to cable homes in exchange for what is shown in the documents as “installation charge” or “caution money”.

While “declaring” (surrendering) a connection, cable homes are supposed to return the boxes to the cable operator, in whose name the MSO issues them. It’s the cable operator’s responsibility to return the boxes to the MSO.

The Digi Cable complaint, lodged with Shakespeare Sarani police station in March 2013, alleged that the company had suffered losses of Rs 30 crore on account of the missing set-top boxes and another Rs 5 crore because of fibre optic cables and equipment that went missing with the boxes.

The FIR also alleged that Nag and two other employees had forged their contracts with Digi Cable, reducing the terms of contract from five to three years and made other changes.

The raids started after the anti-fraud section of the detective department took up the probe. In one such raid in Patuli, about 1,000 boxes of Digi Cable were found in the possession of cable operator Shankar Halder. The serial numbers did not match the ones he had been issued. Halder has been arrested.

An interrogation of Halder led the police to Hathway official Susen Mistry, who switched to Hathway with Nag. Mistry took the cops to the Rajabazar godown, from where 1.5 lakh boxes were recovered.