Fruit juice maker Manpasand under Sebi, corporate ministry scrutiny
corporate affairs ministry and the markets regulator have begun separate investigations into alleged nondisclosures and possible accounting lapses at Manpasand Beverages Ltd, two people familiar with the matter said. The fruit juice maker has seen a free fall in its share price ever since its statutory auditor of eight years quit abruptly a week ago, just ahead of its quarterly earnings release which has since been deferred.
On May 27, Manpasand Beverages announced the resignation of Deloitte Haskins and Sells as its statutory auditor. The auditor’s letter to the company said since Manpasand had not provided ‘significant information’ sought by it, it would not be able to complete the statutory audit of financial statements for 2017-18.
“The markets regulator (Securities and Exchange Board of India or Sebi) is examining the company for alleged disclosure lapses during fund-raising, in its annual reports and governance lapses if any. Sebi is also examining whether Manpasand’s book of accounts is reflecting a true picture,” the first of the two people cited above said on condition of anonymity.
According to the second executive, the ministry of corporate affairs (MCA) is also investigating the issue under Section 143(12) of Companies Act, which requires auditors to report to the government if they suspect any wrongdoing at a company.
“Deloitte has written to MCA saying that despite a month of repeated reminders, it was not able to get the documents and other evidence which could support the costs and revenues and capital expenditure at the company,” the second person said.