Financial Tech, MCX shares tumble in early trade

Jignesh Shah-promoted Financial Technologies and MCX shares tumbled in early trade on Wednesday due to trouble at NSEL.

Financial Technologies shares crashed to a low of Rs 143.25 in early trade on the BSE, as the auditors refused to authenticate the financial statement of the company due to the Rs 5,600-crore trade settlement crisis at its subsidiary, National Spot Exchange Ltd.

Financial Technologies’ Annual General Meeting is scheduled today in Chennai.

The stock, however, recovered to Rs 160 (at 10 a.m. IST), down 4.4 per cent over the previous day’s close.

Dividend payment

This (auditor) development may also delay the dividend payment to investors as the company has deferred the consideration of this proposal at the AGM.

Statutory auditor Deloitte Haskins & Sells had said the financial statement of Financial Technologies could not be relied upon due to the crisis in NSEL.

In a statement, Financial Technologies said: “Due to purported crisis at NSEL in the recent past and based on the communication of management of NSEL and the statutory auditor of NSEL on the financial statement of NSEL, the statutory auditors of the company on September 23, in accordance with Standard on Auditing 560, informed that the audit reports dated May 30 on the standalone and the consolidated financial statement of the company for the year ended March 31, 2013 should no longer be relied upon.”

Agenda items

Hence, the company has decided to defer three agenda items, including consideration of audit report, dividend payment and reappointment of Deloitte Haskins as auditor for this financial year at the AGM.

Following this development, the company said the financial accounts may undergo amendment together with the revised auditor’s report which will be approved and published once the accounts are finalised.

Similarly, MCX shares slipped three per cent to trade at Rs 424 after exchanges sought clarification from the company on its July 29 board meeting.

The company said: “We wish to state that on July 29, 2013, there was no agenda item in the matter. The board was only apprised of an impending litigation and there was no any definitive development of any substantive nature and hence in the interest of compliance by the company, the board decided to delegate the further decision to be taken by the directors committee for implementing any orders that may be passed by the court, if any. There has been no decision by the directors committee as no order had been passed in the intervening period.’’

It further said that the Hon’ble Court on August 29 had rejected the application of La-Fin to implead MCX. Hence, details of the aforesaid matter were not informed to the exchanges on July 29 in terms of Clause 36 of the listing agreement.