Financial Tech ‘profitability not affected, audit report will be recast’; share tumbles

Beleaguered National Spot Exchange Ltd (NSEL) on Wednesday said that it will get tough with defaulters to recover its dues and sought the Government’s support to overcome the payments crisis.

“We need to collectively go behind the 23 planters (defaulters) who took away money,” said Jignesh Shah, Chairman of Financial Technologies, promoter company of NSEL, after the company’s Annual General Meeting here.

Shah also said Financial Technologies’ accounts would be recast after auditors said they had become unreliable post the NSEL revelations. The Financial Technologies stock tumbled 10 per cent (Rs 17.15) on the BSE on Wednesday, closing at Rs 150.20.

‘Victim of fraud’

Shah said: “We should honour investors’ commitment, and any support from the government is desirable. But I fully understand the Government’s stand that the exchange was unregulated. We are a victim too, and the fraud has happened at the management level.”

NSEL has been facing a crisis in settling dues of Rs 5,600 crore to investors after it stopped trading on July 31. Trading was stopped after the Government pulled up the exchange for not complying with trading norms. While suspending trading, NSEL came out with a payment schedule. But it has defaulted on all the six payments, so far. Reacting to concerns raised by NSEL investors, Shah said: “I have an equal responsibility towards minority shareholders and understand the pain of investors. I had a dialogue with the investor forum and told them that we are also a victim.”

Chaos at venue

There was chaos at the venue of Financial Technologies AGM with some NSEL investors protesting outside the meeting hall. Police were called in and the company engaged private security forces to keep NSEL investors at bay.

Protesting investors sought refund of their money from the company and a timeframe for the settlement. Shah said he did not have an answer at present, but would get back with a solution soon. “We need to collectively fight this problem,” he told the investors.

Shah told reporters that one should not take away credit of Financial Technologies, which had built exchanges such as the Multi Commodity Exchange. “Financial market is our dear customer. We are pained that because of NSEL the market has to suffer,” he said.

“This company should not be judged by NSEL alone,” Shah said.

The NSEL crisis affected the AGM, with Financial Technologies’ auditors, Deloitte Haskins & Sells, refusing to authenticate the company’s financial statement.

Shah said Financial Technologies’ audit report will now be recast based on NSEL’s feedback. Deloitte Haskins will recast the accounts. The company’s profitability has not been affected to the level reported by a section of the media, he said.

On Tuesday, Financial Technologies informed the Bombay Stock Exchange that it had postponed voting by shareholders on adoption of the company's balancesheet and profit and loss account for 2012-13.

raja.simhan@thehindu.co.in

(This article was published on September 25, 2013)
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