Companies delaying results because of auditor queries and qualifications is not new. But a little-known Indian furniture company has cited a bizarre reason for deferring its earnings: the auditor has "disappeared".
The BSE-listed Milestone Furniture Ltd. informed exchanges that its result filings will be delayed as the existing chartered accountant, Bhupendra Gandhi, "disappeared and is not answering the calls".
"...so the financial statements are pending due to the unavailability of financial data as well as the absence of persons in charge of the data," the company said in a June 7 filing on the outcome of a board meeting.
"The company is trying its best to resolve the issue so that BSE as well as ROC (Registrar of Companies) compliance in this regard can be done at the earliest," it said.
However, this is not the only unusual thing with Milestone Furniture.
The Thane-registered furniture company, founded in 2014, went public in 2018 on the BSE's SME segment.
Milestone Furniture Ltd. becomes the 246th company to get listed on #BSESME India's largest #SME platform. pic.twitter.com/I7mJQ7Rnj5
While it issued shares at Rs 45 apiece in the IPO, the stock closed at Rs 5.46 apiece on Friday.
At the time of listing in 2018, the company had a promoter holding of about 64.5%, and the rest was publicly held. But according to the latest data on BSE, promoters hold nothing.
And the company didn't report any revenue for FY22.
Milestone Furniture is a "strange case, even by Indian standards", R Narayanaswamy, a retired professor of finance and accounting from the Indian Institute of Management-Bangalore, said.
"The auditor has disappeared. I went through the annual reports for the last two years (2021 and 2022). There is no revenue in 2022, but the expenses are more than that in 2021. In 2021, revenue dropped by 75% but expenses doubled; the cost of material consumed trebled," he told BQ Prime.
"In both years, the auditor has issued clean reports. There is no reservation on going concern. The secretarial audit report is also clean."
BQ Prime awaits a response from Milestone Furniture to emailed queries.
On June 16, the company held an extraordinary general meeting and appointed its additional director, Tanmay Singh, as the managing director.
It still doesn't have a company secretary or a chief executive officer. Its CEO, Ganeshkumar Sadanand Patlikadan, resigned from the position on May 25.
Because of volatile stock price movements, the company has also been put under long-term additional surveillance measure framework.
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