Eveready Industries shares were locked in the 5 per cent lower circuit at Rs 76 on the BSE on Monday after Price Waterhouse & Co Chartered Accountants LLP (PwC) quit as company's auditors on Friday due to their "inability" to obtain sufficient audit evidence of inter-company deposits and its recovery.
The retail battery and flashlight manufacturer has now appointed Singhi & Co Chartered Accountants as its auditor with effect from June 29, 2019.
“On review of their annual continuance process, PwC expressed its inability to continue as the auditors of the company for the reasons included in the 'Basis of Disclaimer of Opinion' on the financial statements and internal financial controls as given by them in the auditors’ report for the year ended March 31, 2019,” Eveready Industries said in a regulatory filing.
According to a Business Standard report, a difference of opinion between Price Waterhouse & Co and Eveready on the recoverability of inter-corporate deposits given to group companies and corporate guarantees on behalf of group entities led to the resignation. READ REPORT HERE
Since April 26, the stock has tanked 48 per cent from a level of Rs 146, after credit ratings agency India Ratings and Research (Ind-Ra) downgraded the company's long-term credit ratings.
The downgrade reflected the company's increased exposure to its group companies for which the company had guarantees and post-dated cheques amounting to Rs 283 crore. That apart, the ratings agency felt that these contingent liabilities could materialise in this fiscal leading to pressure on liquidity position, credit metrics and refinancing risks.
The stock hit a multi-year low of Rs 67 on June 21, 2019 on the BSE. Till 09:50 am, a combined 26,032 equity shares changed hands on the counter and there were pending sell orders for 91,635 shares on the NSE and BSE.