FTIL auditors withdraw report as NSEL crisis casts doubtshttps://indianexpress.com/article/news-archive/web/ftil-auditors-withdraw-report-as-nsel-crisis-casts-doubts/

FTIL auditors withdraw report as NSEL crisis casts doubts

In a fresh trouble for crisis-hit National Spot Exchange Ltd (NSEL),the auditors of Jignesh Shah- led Financial Technologies India Ltd (FTIL) have withdrawn the audit report

In a fresh trouble for crisis-hit National Spot Exchange Ltd (NSEL),the auditors of Jignesh Shah- led Financial Technologies India Ltd (FTIL) have withdrawn the audit report on the company’s stand-alone and consolidated financial statements “owing to purported crisis at NSEL”. Meanwhile,the finance ministry has also submitted its final report on NSEL’s payment default to the Prime Minister’s Office.

The move by the auditor — Deloitte Haskins & Sells — comes at a time when the Forward Market Commission is mulling action against NSEL promoters,FTIL and Jignesh Shah,on their “fit and proper” criteria.

“Due to purported crisis at NSEL in the recent past and based on the communication of management of NSEL and the statutory auditor of NSEL on the financial statements of NSEL,the statutory auditors in accordance with Standard on Auditing (SA) 560 informed that the audit reports dated May 30,2013 of the company for the year ended March 31,2013,should no longer be relied upon,” FTIL said.

Clarifying its stand,FTIL said the balance sheet has already been approved and recommended to shareholders on May 30 along with the auditor’s report. “The purported incidence of NSEL came to the notice of FTIL on July 31,2013,” it said.

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The auditors have raised questions on NSEL and FTIL statements. The withdrawal of audit report has raised questions regarding inter-related transaction between FTIL and MCX.

According to its Annual Report,FTIL’s income from operations for the year ended March 2013 grew by 50 per cent to Rs 752 crore from Rs 501 crore for the year ended March 2012. The net profit (excluding profit from sale ofshare) for the year ended March 31,2013 increased by 237 per cent to Rs 227 crore from Rs 67 crore for the year ended March 2012.

While releasing the 2012-13 results,Dewang Neralla,whole-time director,said,“2012-13 has been a watershed year for Financial Technologies. This year has seen remarkable and path breaking performances by our subsidiaries NSEL and NBHC and our associate IEX. NSEL profit after tax crossed the Rs 127 crore mark in the current year (Rs 29 crore last year) and continues to lead the spot commodity market with 99.78 per cent market share.”

Meanwhile,the panel of secretaries led by department of economic affairs secretary Arvind Mayaram in its has found “minor systemic” failure and the report details long-term measures to deal with such irregularities.

Bourse defaults for sixth time

MUMBAI: NSEL on Tuesday made the sixth straight payment default as it could pay only Rs 11.45 crore to investors out of the scheduled amount of Rs 174.72 crore. With this pay-out,NSEL has been able to settle just about Rs 148 crore out of Rs 5,500 crore outstanding to the 13,000 investors. “The amount being disbursed today is Rs 11.45 crore,” NSEL said in a statement. ens