NSEL fallout: Financial Technologies' auditor withdraw report ahead of AGM
Moneylife Digital Team 24 September 2013

Citing purported crisis at NSEL, the auditor of Jignesh Shah's Financial Technologies has withdrawn his audit report for FY13 ahead of the company's AGM tomorrow

Jignesh Shah-led Financial Technologies (India) Ltd (FTIL) said its auditor has withdrawn the audit report on the company's stand-alone and the consolidated financial statements owing to purported crisis at National Spot Exchange Ltd (NSEL).


In a regulatory filing, FTIL said, it will not discuss points one, two and five in the company's annual general meeting (AGM) on Wednesday. The company's auditor has said that the FY13 accounts cannot be relied upon and hence has withdrawn its audit report.


"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 of the company on 23 September 2013, in accordance with Standard on Auditing (SA) 560 informed that the audit reports dated 30 May 2013, on the stand-alone and the consolidated financial statements of the company for the year ended 31 March 2013, should no longer be relied upon," the filing says.


Interestingly, the notice for the AGM does not even mention the name of the Exchange in the agenda. This is surprising especially as its main promoter, it is the responsibility of FT to answer questions arisen about the crisis at NSEL, especially since NSEL contributed more than Rs120 crore in profits to FT last year. (Financial Technologies silent about NSEL scam in its AGM agenda)


The first point in FTIL's AGM agenda says that the stand alone and consolidated financial statements of the company for the previous financial year should not be relied upon. The second point which was to be discussed was that the company's financial statement for the previous fiscal were audited before the occurrence of NSEL issue.


The filing also stated that FTIL stand alone and consolidated accounts of the company for the previous fiscal may undergo amendment together with revised auditors' report which will be approved and published once the amendment to stand alone and consolidated accounts is finalised.


In a clarification, the company said, "As per standalone financials of FTIL, the total income forms part of revenue generated from NSEL during the FY2012-13 is largely on account of technology services which contributes only 4.79% of the total income of FTIL, further there is no outstanding amount pending against the same."


The Jignesh Shah-led financial software company and promoter of several exchanges in India and abroad such as MCX, MCX-SX, DGCX in Dubai etc. is holding its 25th AGM on 25th September at Chennai.

Nagesh Kini
1 decade ago
At least the Auditor had the courage of his convictions not to be a party to the misdemenours and rightly withdrew his report, certainly an unprecedented step.
Now that he has been served with the Notice to attend the AGM he ought to be present and state the true state of affairs across to the members at the AGM based on the audit carried out by him. He owes it to them.
1 decade ago
Chor "independent" directors and auditors. They should be held liable.
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