Financial Tech rejects PwC report on MCX, warns of legal action against auditor
Financial Technologies India Ltd (FTIL), which has a 26 per cent stake in Multi Commodity Exchange (MCX), on Tuesday rejected a special audit report by PwC on corporate governance at the commodity exchange.
It said it will take legal action against the bourse and PwC for painting a wrong picture in the report.
Financial Technologies (India) Ltd (FTIL) had set up MCX in 2003. It, however, no more controls the exchange even as the company has a 26 per cent stake in it.
In the wake of a Rs. 5,600-crore payment crisis at National Spot Exchange Ltd (NSEL) - a subsidiary of Jignesh Shah-led FTIL - the Forward Markets Commission (FMC) had appointed PwC in December last year to audit books of commodity exchange MCX.
(Read: MCX paid Rs 709 crore to FTIL: PwC report)
"FTIL has neither received the PwC report nor PwC has consulted or sought clarification on the report prepared by PwC. We deny strongly the convenient reports appearing on the media on the findings of the special audit done by PWC on MCX," the company said in a statement.
Last week, MCX's board had decided to take action on the "adverse findings" of PricewaterhouseCoopers' (PwC) special audit report.
"FTIL confirms that no transaction with MCX has violated any legal provisions of corporate law or taxation and it will vehemently pursue legal action against MCX and PwC for painting a wrong picture in its audit report," FTIL said.
FTIL charged that MCX has violated principle of natural justice by not sharing the report and not allowing FTIL to provide clarification on PWC findings.
"This report is intentionally leaked at the time when FTIL is in the process of divestment of equity shares of MCX. FTIL sees such selective leakages as malicious, highly defamatory and motivated with vested interests," the statement added.
FTIL is in the process of reducing its stake in MCX to 2 per cent from the existing 26 per cent after commodity market regulator FMC declared the company unfit to run any exchange and also ordered it not to hold more than 2 per cent in MCX.
It noted that MCX had made all the necessary disclosures in IPO prospectus, including all the related party contracts.
FTIL argued that all the major terms and conditions of related party transactions were in public domain. Moreover, it said that both FTIL and MCX have disclosed related parties transaction in their annual reports.
"All transactions carried out between MCX and FTIL are based on commercial agreements with FTIL creating long term infrastructure platform in terms of technology back-bone and support for the exchange. The question of transfer pricing is not at all applicable. FTIL has paid all the necessary taxes for the services performed & revenue earned by the company," the statement said.
Moreover, FTIL said that MCX's financial operations have been audited by statutory auditors of international repute like Deloitte Haskins & Touche and KPMG associates for the last 10 years besides being regularly audited by the FMC.
-
Signature Play: The Classic Cocktail Is Dead. Or Is It?
Classic cocktails are disappearing from India's cocktail menus. But they're still being ordered, taught to bartenders and borrowed from. So, who's really having the last drink?
-
A New Samvat Wishlist: Inclusive Prosperity And Human Development
India has strengthened its economic foundations through infrastructure, digital access and enterprise. Its next growth chapter must deepen productivity, create better livelihoods and widen participation in prosperity.
-
Love, Sex Aur Dhokha: The Audacious Plot To Spy On Jensen Huang
A Taipei dinner, a Singapore chip buyer and a suspected Chinese asset: inside the alleged spy operation that got close to NVIDIA's Jensen Huang.
-
Ten Things I Learnt This Samvat
Patience can be a trap. Cheap stocks can stay cheap. Leverage can wipe you out. What did Samvat 2082 teach us? Niraj Shah writes on 10 lessons from the year gone by.
-
Talking Points This Week: Tech Nerves, FII Buying, And A Faraway Banking Shock
The global markets are not shining this Diwali. The exception in the large markets is, India.
-
Midterm Rally Lasted A Day. The Hard Reality Of A Divided US May Last Two Years | Opinion
Between a contested AI boom, a debt ceiling that arrives in 2027 and a president with every incentive to act alone, the next two years may prove more volatile than the first day's rally suggests.
-
Blue Wave Will Derail the AI Trade but Won't Dismantle the AI Era | Unhedged Position
The Democrats' sweep of the US Congress will see politics collide with economic forces both over the long and short term.
-
It's Time To Take The GST Council's Bet On Trust Global
Payment records can prove India's services exports, and clear, proportionate rules can bring foreign digital sellers into the tax net.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
