NSEL crisis: PwC to conduct special audit of MCX

MCXForward Markets Commission has approved the appointment of PricewaterhouseCoopers to conduct a special audit of Multi Commodity Exchange of India.

Forward Markets Commission (FMC) has approved the appointment of PricewaterhouseCoopers (PwC) to conduct a special audit of the Multi Commodity Exchange of India Ltd (MCX) and check if there were any related-party deals.

After the settlement crisis was unearthed at the National Spot Exchange (NSEL), the commodity futures market regulator had directed in September for a special audit of MCX to examine if there was trade by related parties, especially the Indian Bullion Markets Association (IBMA) and the National Bulk Handling Corporation (NBHC). NSEL, a bourse owned by MCX promoter Financial Technologies (India)(FTIL), is facing payment settlement problems after it suspended trading in July-end following government direction due to violation of norms.

According to FMC's latest report released on Friday, the regulator approved the appointment of PwC on November 19, as suggested by the audit committee of the exchange's board. The terms of reference also include checking of expenditure items such as donations and warehousing charges. The auditor will probe if NSEL subsidiary IBMA and FTIL arm NBHC traded on MCX.

The regulator said it has also approved the appointment of an independent director and four shareholder directors on the MCX board. Satyananda Mishra, a retired IAS officer, has been hired as an independent director on the board until March 31, 2016. His appointment as the chairman of the board has also been cleared.

These apart, it has cleared the appointment of G Anantharaman, a retired IRS officer, as chairman of the audit committee and retired IAS officier Ravi Kamal Bhargava as chairman of the remuneration committee of the exchange.

SBI deputy managing director and group executive BV Chaubal, Canara Bank general manager MAK Prabhu, Bank of Baroda general manager Sanjay Agarwal and Union Bank of India general manager KN Reghunathan have been hired as shareholder directors on the MCX Board for 2013-14, or up to the date of the annual general meeting, the regulator said.

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