financial software and systems: PwC resigns as Financial Software auditor
The company has appointed S Vishwanathan as its new auditor, Care Ratings said in its latest rating report. The rating company assigned a ‘BBB’ rating to the company’s ₹714 crore loans and placed it on ‘credit watch’ with ‘negative implications’.
FSS had paid ₹8 crore as consultancy fee to Boston Consulting Group to provide a business strategy to apply for the NUE license, which was offered by the Reserve Bank of India to private entities to set up payment infrastructure. PwC wanted to clarify that during the 2021 financial year, management did not seek prior approval from the board of directors for this expense item. According to PwC, Care Ratings said there was a failure in the company’s internal control systems.
FSS management denied this. The company said the board was subsequently informed of the decision to apply for the NUE license and related expenses.
FSS management informed Care Ratings that its board had ratified the expense after the fact and therefore the matter did not warrant auditor qualification. A disagreement over the issue led to PwC’s resignation, which also delayed the company’s release of its FY21 annual report. Nagaraj Mylandla, founder and chairman of FSS, did not respond to the request for comment from ET.
FSS is leading the Vishwakarma Payments consortium, which includes Cholamandalam Investments, Zoho, Zerodha, RazorPay, Ujjivan and Airpay, to apply for a NUE license.