Deloitte, BSR & Co can’t audit MCX books, for Now

Print Posted Date : 09-Apr-2014 , 08:32:48 am | Posted By CASANSAAR

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Top-notch audit firms Deloitte and BSR and Co, a preferred partner of KPMG, will be barred from auditing the books of India's largest commodity bourse, MCX, whose dealings with group entities have come under regulatory glare.

Commodity market regulator Forward Markets Commission (FMC) has directed MCX to refrain from hiring Deloitte and BSR and Company as auditors until it ascertains that these questionable transactions could not have been detected by the two statutory auditors.

According to the interim findings of a forensic audit of MCX carried out by PwC, between April 1, 2002 and September 30, 2013, MCX entered into several non-trading transactions with related parties, some without proper approvals and documentation, at a cost mark-up and some wherein delivery of services was questionable even after money for them was paid by the bourse.

MCX, the country's only listed bourse, became operational in November 2003. From FY04 to FY09, Deloitte, Haskins & Sells was the statutory auditor while during FY10-FY12, BSR and Co audited the bourse's books. In FY13, the exchange again utilised the services of Deloitte, its current auditor.

Speaking on behalf of Deloitte, a public relations company official said, "As a policy, we do not comment on client-related matters." When asked for a reaction on the FMC direction, a BSR spokesperson said, "We cannot comment on your query until we have further details on the matter."

An MCX spokesperson was unavailable for comment. "FMC has asked that MCX should examine whether PwC's findings could have been detected by the statutory auditors of the exchange since inception in 2003," said the government official cited earlier.

"Till MCX completes this exercise, we have directed them not to use the services of the statutory auditors it has used thus far." The special audit was ordered by FMC after a Rs 5,500-crore payment scandal rocked National Spot Exchange Ltd (NSEL), a subsidiary of Financial Technologies (India), the promoter of MCX.

In the course of FMC's investigation, it also came to light that a subsidiary of NSEL traded as a client on MCX. PwC's nterim report was submitted in February this year. (Economic Times)

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