Auditor cancels okay of Financial Technologies accounts

Shares of Financial Technologies India Ltd (FTIL), the promoter of the fraud-hit National Stock Exchange Ltd, (NSEL), plunged 14.4 per cent in morning trade after FTIL informed the stock exchanges on Tuesday that its statutory auditor Deloitte, Haskins & Sells has withdrawn its certificates about the genuineness of the company's results for 2012-13.

"On the basis of the above, FTIL's accounts for financial year 2012-13 may undergo amendment together with revised auditors' reports which will be approved and published once the amendment to the accounts are finalised," FTIL said in its exchange filing.

Deloitte was prompted by a similar action by the defunct NSEL's auditor Mukesh T Shah & Co, which informed the spot exchange about its decision on Saturday.

The move by Deloitte became public a day before FTIL shareholders meet for its annual general meeting and the company said that it will now have to defer discussion on some of the issues that related to the audit report.

Although the development has not resulted in any scrutiny by the government yet, experts say Deloitte will have to revisit its entire audit of FTIL in the wake of the controversy at the commodities exchange.

FTIL is the flagship of the group that promoted NSEL and is run by engineer-turned-entrepreneur Jignesh Shah.

In its communication to the Bombay Stock Exchange, the company said that due to the purported crisis at NSEL and based on communication from the management of NSEL and also the statutory auditor of the bourse, on 23 September, Deloitte, "in accordance with Standard on Auditing (SA) 560, informed that the audit reports dated May 30, 2013, on the standalone and consolidated financial statements of the company for the year ended March 31, 2013, should no longer be relied upon".