financial software and systems: PwC resigns as auditor of Financial Software

According to a rating report by Care Ratings, Price Waterhouse Chartered Accountant (PwC) has resigned as auditor of Financial Software and Systems (FSS) over disclosures related to the application for a new umbrella entity (NUE) management. There are differences with

CARE Ratings in its latest rating report said that the company has appointed S Vishwanathan as the new auditor. The rating firm assigned a ‘BBB’ rating to the company’s ₹714 crore debt and placed it under “credit watch” with a “negative impact”.

FSS had paid ₹8 crore as consultancy fee to Boston Consulting Group to provide a business strategy to apply for NUE license, which was set up by the Reserve Bank of India for setting up a payment infrastructure for private entities. was proposed. The PwC wanted to qualify that in FY 2021, the management had not sought prior approval of the Board for this expenditure item. According to PwC, Care Ratings said, there was a lapse in the company’s internal control systems.

The FSS management denied this. The company said the board was subsequently informed about the decision to apply for the NUE license and related expenses.

The FSS Management informed CARE Ratings that its Board has confirmed the expenditure, and therefore the case does not require qualification by the auditor. Disagreements on the matter led to the resignation of PwC, which also delayed the company in declaring its annual report for FY21. FSS founder and president Nagraj Mylandla did not respond to ET’s request for comment.

FSS is leading the Vishwakarma Payments consortium, which includes Cholamandalam Investments, Zoho, Zerodha, Razorpay, Ujjivan and Airpay, to apply for NUE licenses.

Originally published at Pen 18