Manpasand Beverages continues freefall over auditor's abrupt exit; Religare suspends coverage

Manpasand Beverages continued its sharp downfall for the third consecutive day as investors could have chosen to be cautious of its auditor’s abrupt exit ahead of Board meeting.

The company’s shares clocked 20 percent lower circuit for the past two days as its auditor, Deloitte India, quit during the weekend. Further, what fuelled the downfall is the firm cancelling its Board meeting, which was scheduled on May 30, 2018.

Religare Broking has suspended coverage on the stock, citing lack of clarity on resignation of its auditors. It also flagged concerns on lack of disclosures provided by the firm with respect to this issue.

“We believe the stock could face uncertain times in the near term in wake of this development and hence, we have decided to suspend our coverage on the stock until further clarity from the management,” the brokerage house said in a report.

On Monday evening, the company issued a statement to the exchanges, assuring investors that the situation involving Deloitte was ‘unfortunate’ but the decision was taken keeping in mind shareholders’ interest.

“Everything related to financial results announcement and the timing of this event is purely coincidental and has no direct correlation. The board meeting has been postponed and the new date will be announced shortly,” the company said in a filing to the exchanges. “This is just a minor hiccup and doesn't represent any long term business impact.”

The company’s management, in an interview to CNBC-TV18, said that the auditor had sought more information, which was delayed on the back of system upgrades. Further, distribution-related information was pending from the company’s side, it said, adding that due to logistical issues, it could not be done on time.

Going forward, it said that the results will be declared shortly. It is working with the new auditors and will give out all information regarding the same.

The stock has fallen 38 percent in the past one month, while in the past three-days, the stock has lost 42 percent. At 10:28 hrs Manpasand Beverages was quoting at Rs 248.30, down Rs 27.55, or 9.99 percent. It has touched a 52-week low of Rs 248.30.