HC appoints Deloitte, Wipro as auditors in FT-NSE case

The Bombay High Court appointed Deloitte Haskins & Sells and Wipro to conduct a systems audit of Financial Technologies’ (FT) front-end trading solution (CTCL). The NSE had put the exchange solutions provider on a watch list in October 2008 due to alleged flaws in the software, following which FT dragged NSE to court. Significantly, Justice Anand Nirgude directed NSE to provide demonstrations, approvals and trading ID passwords to existing and new and purchasers of FT products in equity and equity F&O segments, for which FT was empanelled as a vendor by NSE. FT’s counsel Janak Dwarkadas earlier contended that the company and its product users’ businesses were affected, with the NSE putting approvals and issuance of trading IDs on hold on ground that the “watch list” issue was being contested in court. Justice Nirgude directed the third-party auditors to submit their report to the high court on or before March 1, 2009. Before undertaking the audit, the auditors will decide on the reference terms and send a notice asking both FT and NSE to file their submissions and objections. Both parties will share the fees of the third-party auditors, in equal measure. The court held that since FT’s products enjoyed an 80% market share among the stock brokers, denial of approvals or trading IDs would ultimately hurt the users and affect the exchange’s business. “He (FT) has been supplying the trading solutions for many years. I don’t want to disturb the arrangement,” observed Justice Nirgude. “This is a product he (FT) is selling to run your (NSE) system... If the product is not good, you (NSE) and the purchaser will suffer,” he added. FT claimed that it suffered daily losses of Rs 60 lakh since October. – www.economictimes.indiatimes.com