NSEL Auditor against cross examination by FTIL, Jignesh?

CNBC TV18 has learnt from sources that the forensic Auditor of NSEL, Grant Thornton is likely to refuse being subjected to cross examination by Financial Technologies India Limited (FTIL), Jignesh Shah, Joseph Massey and Shreekant Javalgekar. 

The stance that Grant Thornton is likely to take is that since the Forward Markets Commission (FMC) was the agency responsible for appointment of the auditor, Grant Thornton would be answerable to the regulator, alone.  With the breakout of the NSEL fiasco, the FMC had appointed Grant Thornton as the forensic auditor to look into the crisis ridden commodity exchange. The auditor had submitted its findings which raised concerns with respect to investors’ money being shipped into other businesses of NSEL.  Taking into account the findings of Grant Thornton report, the FMC had slapped FTIL, Jignesh Shah, Joseph  Massey and Shreekant Javalgekar with a show cause notice, questioning the “fit and proper” status of the 4 entities.  Responding to personal summons of the FMC, the four entities concerned had sought an opportunity to cross question the forensic auditor. Interestingly, the FMC had allowed FTIL and the 3 Former NSEL Directors to proceed with cross-examining Grant Thornton. This development had left many stakeholders with raised eyebrows, as this was seen as a mere attempt by Jignesh Shah to seek greater time. What many wondered was how a forensic auditor was being cross examined by the very entities that were responsible for furnishing the necessary data for the audit.   The regulator had prescribed Nov 25 as the date for conducting the cross-examination. However, sources have confirmed that the no such cross-examination was conducted on Nov 25.  The FMC, however, has sought to clarify on the issue. Highly placed sources within the FMC confirmed that Grant Thornton has merely sought an extension of time for cross examination, citing “genuine” concerns. CNBC TV18 has learnt that the Grant Thornton officials will be meeting the FMC officials on Dec 3.  CNBC TV18’s queries to the auditor, Grant Thornton, have failed to elicit a response.  Experts now believe that with the growing confusion over Grant Thornton likely stance over cross-examination will further add to the lack of clarity on the road ahead for the various stakeholders. This confusion over cross examination also allows Jignesh Shah with greater legal legroom and much needed time, even as the investors’ watch with growing helplessness.