The Forward Markets Commission (
FMC) isn’t taking PricewaterhouseCoopers (
PwC)’s forensic audit report of Multi Commodity Exchange (
MCX) lightly. In the wake of the damning observations by the
auditor, FMC has directed MCX to drop
Deloitte as statutory auditor.
“We think Deloitte should have detected some of the violations that
occurred at MCX,” said an FMC
official. A Deloitte spokesperson said the
company would respect and abide by any decision taken by the regulator.
Earlier, Deloitte had defended its audit work at MCX, saying the
Companies Act and the Securities Exchange Board of India (Sebi)’s
corporate governance norms didn’t mandate it to go beyond basic
examination of the book of accounts.
“As a statutory auditor, the scope of our work at MCX was to ensure the
management made a full disclosure of related-party transactions and
whether these were cleared by the board or not. As a forensic auditor,
PwC had a wider scope to investigate the entities with which MCX had
trade relations,” said a Deloitte spokesperson
PwC’s forensic audit of MCX had revealed while there were more than 670
related-party trades on the platform, the company had disclosed only
235. The special audit report had also highlighted transactions worth Rs
105 crore were carried out with benami entities.