FTIL threatens legal action against MCX, PwC

Financial Technologies India Ltd (FTIL) on Tuesday said it had neither received the Pricewate-rhouseCoopers (PwC) report, nor had PwC consulted or sought a clarification on its report.

An FTIL statement, issued before MCX made the PwC report public, said Multi-Commodity Exchange (MCX) had violated the principle of natural justice by not sharing the report and not allowing FTIL to provide its clarification on the PwC findings. "This report is intentionally leaked at the time when FTIL is in the process of divestment of equity shares of MCX. FTIL sees such selective leakages as malicious, highly defamatory and motivated with vested interests," the statement said.

It said none of its transactions with MCX had violated any legal provisions of corporate law or taxation, adding it would vehemently pursue legal action against MCX and PwC for painting a wrong picture in the audit report. In fact, all necessary disclosures were made by MCX in its prospectus, including those on related-party contracts entered into between the parties during MCX's public issue, it said.

FTIL said for the last 10 years, MCX's finances and operations had been audited by reputed statutory auditors such as Deloitte Haskins and Touche and KPMG. It had also been regularly audited by the Forward Markets Commission, it said.

All transactions carried out between MCX and FTIL are based on commercial agreements with FTIL creating long-term infrastructure platform in terms of technology back-bone and support for the exchange. The question of transfer pricing is not at all applicable. FTIL has paid all the necessary taxes for the services performed and revenue earned by the company.