Shares of fruit juice manufacturer Manpasand Beverages Ltd, backed by SAIF Partners, tanked 20% on Monday after the resignation of the company’s statutory auditor Deloitte Haskins and Sells LLP.
The auditor resigned during the weekend, four days ahead of a board meeting where the Vadodara-based company was to look at audited results for the year ended March 2018. The board meeting has been postponed, Manpasand said in a stock market disclosure.
It added: "Everything related to financial results announcement and the timing of this event is purely coincidental and has no direct correlation." The company dismissed the resignation as "a minor hiccup".
"It is very unfortunate that we had to part ways with our long-term associate," the company said.
The reason behind Deloitte's decision to step down as the auditor couldn't immediately be ascertained.
To fill up the vacancy, the company has appointed Delhi-based Mehra Goel & Co. as the new auditor with effect from May 27 (Sunday). The new auditor “shall hold office till conclusion of the annual general meeting, subject to approval of the members of the company,” it said.
Email queries to SAIF Partners didn’t get any response till the time of publishing this report. Deloitte said in a statement: “We are bound by confidentiality obligations and are unable to comment on client-specific matters.”
Manpasand Beverages’ share price had hit a peak in January this year, tripling over its initial public offering (IPO) price three years ago. The stock has corrected since then, but even after the crash on Monday, it trades at over two times its IPO price.
The company’s shares cracked the lower circuit breaker, or the maximum it can decline in a single day, on both the NSE and the BSE, to hit the Rs 344 a share mark.
On Tuesday, shares of Manpasand again slumped 20% to trade at Rs 275.85 apiece on the BSE.
The firm has quit as an auditor in other companies as well in recent years. In 2014, Deloitte had decided to step down as the statutory auditor of Blackstone-backed Financial Technologies India Ltd after the latter got embroiled in a Rs 5,574 crore payment crisis.
Deloitte is also an auditor for Fortis Healthcare Ltd, the firm behind India's second-largest hospital chain.
According to a media report, the auditing firm refused to sign off on Fortis’s second-quarter results last year unless founder-brothers returned Rs 500 crore they had allegedly taken out of the hospital company without board approval.
*This article has been updated to add Tuesday's share price and a comment from Deloitte.