Reliance Infrastructure falls as auditors raise red flags on fourth quarter results
By Abhirup Roy and Promit Mukherjee MUMBAI (Reuters) - Shares in Reliance Infrastructure Ltd closed nearly 5% lower on Monday, after its auditors raised red flags around its latest financial results and cast doubts over the manner in which the firm had accounted for several transactions. The company, a construction, power and defence conglomerate that is part of business tycoon Anil Ambani's Reliance Group, late Friday reported a consolidated loss of 33.01 billion rupees ($472.56 million) for the quarter ended March 2019. The loss was mainly attributed to a 45 billion rupee write-off related to its associate Reliance Naval & Engineering Ltd RELV.NS and a 20 billion rupees impairment booked in Reliance Power, its power generation subsidiary
By Abhirup Roy and Promit Mukherjee
MUMBAI (Reuters) - Shares in Reliance Infrastructure Ltd closed nearly 5% lower on Monday, after its auditors raised red flags around its latest financial results and cast doubts over the manner in which the firm had accounted for several transactions.
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The company, a construction, power and defence conglomerate that is part of business tycoon Anil Ambani's Reliance Group, late Friday reported a consolidated loss of 33.01 billion rupees ($472.56 million) for the quarter ended March 2019.
The loss was mainly attributed to a 45 billion rupee write-off related to its associate Reliance Naval & Engineering Ltd RELV.NS and a 20 billion rupees impairment booked in Reliance Power, its power generation subsidiary.
Auditors BSR & Co, and Pathak H.D. & Associates pointed out several anomalies and a lack of clarity in instances of related party transactions and accounting methodology.
Losses incurred by the company and subsidiaries and certain loans for which the company is a guarantor show that some "material uncertainty exists that may cast significant doubt on the group's ability... to continue as a going concern," according to the auditors' report posted on the company website.
In response to a Reuters query, Reliance Infrastructure said the group has already announced the sale of one of its road assets in north India that will bring in 19 billion rupees of cash.
The company also said it stands potentially to get substantial funds from pending regulatory claims and arbitration proceedings.
The company did not respond to specific queries around the auditors' concerns.
Ambani and his companies have lately faced greater scrutiny from auditors and rating agencies, even as bankers and creditors have pressured his firms to pay back dues.
Last week PwC resigned as the auditor of group company Reliance Capital Ltd RLCP.NS, saying it did not receive a "satisfactory response" to its queries on certain observations in its assessment of the annual financial results.
(Reporting by Abhirup Roy and Promit Mukherjee; Editing by Rashmi Aich and David Evans)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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