End Game Financial Technologies too ?

Is this the end game for Financial Technologies too ???

i have followed FTIL growth story and the related one of Jignesh Shah very closely ...but to think this will end like this ...

how can someone sitting at the cusp of a virtual revolution , has successfully set up exchanges in India and many countries around the world , let go of it all like this 

Through leverage of Technology , Guile & Passion to succeed Jignesh and his team came and conquered the Commodity scene in India and were on way to repeat it in Stocks and then it all unravelled :( 

Its a clear out & out fraud , but hard to believe ...such a massive opportunity just about to be laid waste .....

Govt itself or through interested parties will take it all away , as clearly , there is an issue of severe deficiency or even absence of a basic stipulation - Fit & Proper !!

I think it will all end in an acquisition at a stupid rate to an existing institution the Satyam way !!

Reminds me of a famous Warren Buffett Quote 

“Somebody once said that in looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if you don’t have the first, the other two will kill you."

Eco times article

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The Business Gamut of FTIL ...such a nice spread across the financial channels ..now about to be laid waste ...Source FTIL Website

Accounting & Auditing Shenanigans - I - Auditors withdraw audit report after circulation

Unthinkable has happened - Auditors Withdraw audit report after circulation

The almost unthinkable has happened , just a day before the AGM, Deloitte Haskins & Sells, the auditors of Financial Technologies has withdrawn its audit report for fiscal 2012-13. These results had been released on 30th May and also dispatched to the shareholders. 

The auditor citing crises in NSEL held the accounts as unreliable withdrew its report. 

This may have been due to the fact that NSEL’s auditor, Mukesh P Shah & Co, has also withdrawn its audit report.

The issue - NSEL, promoted by FTIL, has to settle some 6,000 Crs dues to 148 members/brokers, representing 13,000 investor clients, after its trade was suspended on July 31 by government orders. Investigations have revealed related insiders, missing stocks, frauds & other misuse. 

The institute of Chartered Accountants (ICAI) has launched an investigation into the matter which basically means assessing the auditors, their procedures, gaps, overlooking & any related ultra vires etc.

Is it enough ?? remember Satyam - nothing real happened then , hope this time they haul these guys over hot coals. 

This raises few pertinent questions – 

- are the auditor reports reliable

- Tenure & fees of auditors

- Can the auditors hide behind sample checks

Reliability appears very low & you need to do your own due diligence.

As the public probity increases , the agencies confront white collar crime more often, the role of auditors, validity of their reports have come into question time & again. 

Long Tenures , Proximity often comes to play whether its a deliberate issue or sheer over confidence, then Satyam happens !

A sudden jump in auditor fees is another big give away !

Ever greening of loans ( happily used by banks) or amending Accounting standards of ICAI to help companies overcome prudence and capitalise interest costs - Power Projects, point to Govt's debatable example setting.

Solution - Honest & sufficient oversight either by an ICAI wing or some other statutory body, which should look for such interesting variations, ask relevant questions and also red flag Org & Auditors for immediate future. 

Severely punishment for the guilty partners & the firms too. 

The statement of FTIL on the Auditors' act and other relevant issues is attached for perusal

FTIL Statement

A brief note of caution on 20% - 80% Housing Loan schemes

All the people investing in 20% / 80% schemes of builders should be aware that the builder has taken his full money from the bank and in event of default you are equally liable viz the bank can come after your assets. More so if the project is incomplete , there is no asset per se except land and a structure kind.

This is a serious issue and should be kept in mind.

Those who want to speculate via this route seem very vulnerable.

Your assets means all assets

If you have a family member jointly signing with you , even all their assets are covered in this ambit !

So If you have to enter into such an arrangement , do it only with the top firms in Reality sector but with knowledge that you are equally & fully involved !

btw - what is top firm these days  

ps - this will be more important for people around you with medium income levels trying to get rich quick or board the property train in a big way...in such difficult recessionary times , jobs aren't so certain & secure , vulnerability is much higher..please guide them well & earn some Karma points !!

Fat fingers & the colossal damage they do !

Brokerages should emphasize the importance of internal checks and controls over & over again

A typing error by a clerk at the Tel Aviv Stock Exchange caused one of Israel's largest investment firms to lose nearly 100 percent of its market value on Sunday

2-3 days back NASDAQ closed trading for 3 hours

a Chinese brokerage firm error shot the whole market up by 5%

The weakest link can sometimes ...punch you in the face & HARD too