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    Default ICAI begins probe into issues involving NSEL auditors

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    Accounting regulator Institute of Chartered Accountants of India (ICAI) has referred to the disciplinary committee the matter involving auditors of National Spot Exchange (NSEL), on a complaint following the Rs 5,600 crore payment crisis at NSEL.

    Besides, various details have been sought by ICAI related to Financial Technologies (FTIL), a promoter entity of NSEL, after the firm's auditor withdrew the audit reports this week.

    "We have referred the matter (of NSEL auditor) to the disciplinary committee. A complaint in the NSEL has been filed and an enquiry has been initiated," ICAI President Subodh Kumar Agrawal said. However, he did not reveal the name of the complainant.

    MUST READ: What investors can learn from NSEL crisis

    In the case of enquiry against FTIL, Agrawal said that as of now it has only sought information from various entities.

    According to the ICAI president the inquiry would only involve any non-compliances on part of the chartered accountants related to the auditing regulations.

    When asked about the timing of withdrawal of the audit reports, Agrawal said that it would also be looked into but added "before it (audit reports) was considered by the shareholders it was withdrawn".

    The audited accounts were withdrawn a day before FTIL's annual shareholder meeting on September 25.

    When asked about media reports on NSEL's auditor Mukesh P Shah and Co owner was a relative of FTIL Chairman and MD Jignesh Shah, ICAI president said that he had no information in that regard but as per norms an auditor cannot audit his relative's company.

    Earlier this week, FTIL auditor Deloitte Haskins & Sells withdrew its audit report on the company saying the financial statements for 2012-13 financial year cannot be "relied upon" any "longer" in the wake of NSEL payment crisis.

    According to sources, the withdrawal came as NSEL's auditor Mukesh P Shah & Co had also withdrawn the report.

    NSEL is facing a crisis of settling Rs 5,600 crore dues to 148 members/brokers, representing 13,000 investor clients, after its trade was suspended on July 31 by government orders.

 

 

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