Ram Narsinghdev Sahgal & Almas Meherally, Mumbai
The Economic Times
An independent auditor, acceptable to both Financial Technologies (FT) and the National Stock Exchange (NSE), will conduct a system audit of FT’s software solution to determine whether or not NSE was justified in putting the former on a watch list.
The name of the independent auditor will be announced on Tuesday by Justice Anand Nirgude, who is hearing the dispute between FT and NSE in the Bombay High Court (HC). While FT has proposed that Ernst & Young or Deloitte undertake the audit, NSE had appointed iSec Services in December, which was not acceptable to FT.
However, at a hearing in the high court on Monday, FT was not granted interim relief whereby it can sell its software solution (CTCL) to NSE brokers, who want to use the company’s front-end software to trade on the exchange. FT has claimed in its petition that it has been suffering a loss of Rs 60 lakh per day since October, when it was put on the watch list by NSE, as it has been unable to conduct demonstrations of its solutions for new clients or even sell its products after demos, despite Sebi having mandated approval in 30 days after the demos have been completed.
Earlier, NSE contended before the court that by putting FT on a watch list it had not removed FT or its solution from the approved vendor’s list. Rather, NSE’s counsel Viraj Tulzapurkar argued that NSE had given FT a chance to rectify the “defects” in its solution but that the latter preferred to take legal recourse instead of amicably settling the matter.
However, FT’s counsel Janak Dwarkadas questioned the grounds on which his client was put on watch list. “You (NSE) cannot make an audit after putting me (FT) on watch list and then find something in the audit report (against FT),” said Dwarkadas in context of NSE performing an audit of FT’s solution.
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