PwC may submit final report on MCX today

Suresh P Iyengar Updated - March 12, 2018 at 09:14 PM.

Audit report is expected to cover transactions of related parties such as Bullion Market Association, National Bulk Handling Corporation

Global audit firm PricewaterhouseCoopers is expected to submit its final report on Multi Commodity Exchange to commodity market regulator Forward Markets Commission on Monday, said a source close to the development.

The first report of the audit firm, submitted in February, went into the financial details since inception of the exchange in 2003 and pointed out glaring discrepancies in MCX’s operations.

The Commission has already ring-fenced MCX from the ₹5,600-crore trade default by the National Spot Exchange by changing the management and replacing the board with independent directors. The market regulator wanted to ascertain the impact of NSEL trade default on MCX, since it was part of the same group.

The second part of the audit report is expected to cover transactions of related parties such as Indian Bullion Market Association and National Bulk Handling Corporation in MCX since inception of the futures exchange. PwC will also look into the minutes of the board meeting and find out whether there were any discussions on the functioning of the scam-ridden NSEL.

The audit firm may also probe into trade details to check whether there are any specific patterns in defaults and examine details of persons acting in concert. Besides, the second report will go through the risk management followed by the exchange and review the important decisions taken by the management.

The first report has pointed out major irregularities in high value cash transactions and donations paid out by the exchange. The regulator sent the first report to MCX and sought details on the follow-up action taken by the exchange last month, said sources.

FMC is also keen to know why the statutory and internal auditors failed to identify the donations paid through related parties and professionals in their audit reports.

Published on April 20, 2014 17:03
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