Mumbai: Two auditors from renowned auditing firm, S V Ghatalia and Associates LLP, have been arrested by the Economic Offences Wing in connection with the National Spot Exchange Limited scam that erupted six years ago.
Shravan Jalan and Amit Kabra -- the two auditors -- were remanded to EOW custody till Monday by a local court. SV Ghatalia and Associates is an affiliate of global auditing firm Ernst & Young.
An EOW official said that the two auditors had not performed due diligence while evaluating the NSEL stocks during their audit carried out between 2009 and 2012.
The official alleged that their faulty audit report was an attempt to cover up the status of the NSEL and project that the company was in good health.
Reacting to the arrests, NSEL told IANS that it is "shocked" at the "unwarranted" arrests. "Auditing of the company accounts and 'stock-audit of an exchange' are totally different subjects. Stock verification of an exchange is done
by buyers, brokers and auditors of the brokers, who had visited the warehouses more than 50 times, and had verified the stock availability in those warehouses. Ernst & Young had nothing to do with verification of these stocks," it said.
NSEL also said that the action by the EOW has taken place after over six years since the NSEL payment default case emerged.
