The latest Q3 Results of EKI Energy has uncovered a dark truth : non-compliance with IndAS 115, Revenue Recognition.
Auditor Walker Chandiok (Grant Thornton) today issued a qualified report.
Is this just the tip of the iceberg?
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Reported Figures for 9M-
Revenue - 1384 Cr
PBT - 347 Cr
PAT - 260 Cr
As per Auditor -
Revenue - 1194 Cr (-14%)
PBT - 237 Cr (-32%)
PAT - 177 Cr (-32%)
Generally company also have Concall post results,this time there is no mention of concall.
Dark clouds of doubt now loom over the previous auditor D.N. Jhamb, who issued unqualified report in Sep-22, and resigned on 8-Dec-22 citing reasons of pre-occupation.
Now the bigger question is whether revenue recognised in earlier years are as per IndAS requirements or not?
More interestingly - In 4-Nov-20, just before there IPO, Anmol Bohra & Co also resigned as Auditor citing the same reason of pre-occupation.
Now Walker Chandiok - which comes with qualified report
The eye brow raising question is Whether it’s previous 4 year financial were relying on which stock has been on its dream run
IPO came at 40(adjusted split)
Made a high of 3150 (7875%)
Now trading at 1097 ~ corrected by more than 65% from highs
A good read from Bloomberg on EKI Energy raising question on its business
Clarification from the company 's Investor Presentation. It mainly talks about the difference between the opinion of Auditor/Accounting Principles and Management over recognition of the revenue for the period 9M ended on 31st Dec -22
Question of accounting gimmick remain same
Adding more redlfags on EKI Subsidiary financials & their status of audit
- Unaudited
- Auditor have signed FS but no Audit Report available
- Audited by old auditor who resigned earlier due to pre-commitments
As per WSJ, 7 Mauritius companies collectively would have held 19.43% of the offering,
Let’s delve deeper into each of these entities and their connection
Here are 4 entities & their % of subscription to anchor book 1. Great International Tusker Fund (2.47%) 2. Ayushmat Ltd (2.32%) 3. Elm Park Fund (5.67%) 4. Aviator Global Investment Fund (1.25%)
The remainder of the response consisted of 330 pages of court records, along with 53 pages of high-level financials, general information, and details on irrelevant corporate initiatives, such as how it encourages female entrepreneurship and the production of safe vegetables.
Adani Failed To Specifically Answer 62 of Our 88 Questions
Of The Questions It Did Answer, The Group Largely Confirmed Or Attempted to Sidestep Our Findings
As per regulation 155 of SEBI ICDR Regulations company cannot bring the FPO if investigation by sebi is ongoing or show cause notice has been served and pending
Backstory,In July-21 Govt in parliament responded to questions raised by @MahuaMoitra and stated that SEBI is investigating Adani Group
“Good corporate governance is about 'intellectual honesty, not just sticking to rules & regulations, capital flowed towards co that practice good governance'
Mega thread 🧵 of Corporate Governance issues, frauds exposed by us
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