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Auditors of NSEL-FTIL – Rs 5500 crore scam under scanner

Chennai, Sep 26 () : Auditors of Financial Technologies India Ltd (FTIL) and its subsidiary, National Spot Exchange  Ltd (NSEL),  are being probed by various agencies.

The two audit firms withdrawing the report on Tuesday, a day before the FTIL AGM was to meet here has the auditors regulator, the Institute of Chartered Accountants of India (ICAI) initiating a probe into the role of auditors and auditing practices followed at Financial Technologies India (FTIL) and its subsidiary, National Spot Exchange (NSEL).

Day before FTIL AGM in Chennai, Deloitte Haskins & Sells, auditors of Jignesh Shah-owned FTIL withdrew the audit report for fiscal 2012-13, stating that the ongoing crisis at NSEL was the reason.

Meanwhile, Mukesh P Shah & Co, the auditors of NSEL too have withdrawn the report. ICAI agrees that auditors can withdraw report under certain clauses but the regulator needs information from these firms on the reasons for this action and said would join the other regulators, like Forward Market Commission who is a regulator of NSEL.

ICAI seeks a copy of these two audit reports that are filed with NSEL. 13,000 investors’ money worth Rs 5500 core put in through 148 brokers and members of NSEL is at stake.

ICAI rule gives 21 days’ time for the auditors to furnish a reply on their actions. The disciplinary committee will discuss the issue with other agencies like Registrar of Companies and serious fraud investigation office will submit the report.

Aravind Mayavaramy, Economic Affairs Secretary’s probe report is with the Finance ministry. Arvind Mayaram has already recommended an inquiry by government.

The latest to probe Financial Technologies (India) is the Securities and Exchange Board of India (Sebi). Joseph Massey in a filing said that on September 30, he would end his tenure as director of MCX-SX.

Known as a close aide of Jignesh Shah, Joseph had offered himself for re-appointment. The Financial Technologies India Ltd general meeting held in Chennai yesterday had only a few shareholders who created a ruckus over the role of directors in the settlement crisis in NSEL and chairman Jignesh Shah trying to win them over.