After split with Deloitte, Manpasand Beverages appoints new auditor

Company may declare March quarter results by June 15

Gujarat-based beverage major Manpasand, in the eye of a storm over the sudden resignation of its auditor Deloitte on Saturday, has said it is targeting June 15 for the release of its March quarter results for 2017-18.

Speaking to Business Standard, Manpasand’s Chairman and Managing Director Dhirendra Singh said his firm appointed a new auditor, Mehra Goel & Co, on Sunday and was working closely with it to ensure the results could be declared by mid-June. “Deloitte has been our long-standing partner, which has worked with us for nearly eight years. But now that they are no longer with us, our first priority would be to ensure that the results are out at the earliest. I do not want to extend this beyond June 15," Singh said over phone from Vadodara, where he is based. 

The company had on May 23 announced that it would declare its results on May 30, which has now been postponed, prompting the stock to crash 42 per cent in three days. The stock ended the day at Rs 248.3 per unit on the BSE.

“We are working closely with our new auditor to furnish all required details for the purpose and I am hoping we can be out with this (results) quickly," he said. Deloitte had said on Saturday that “significant information” requested by it from Manpasand at various points in time for the purpose of audit of results was not provided by the company. The buzz is that Deloitte has since approached the Ministry of Corporate Affairs on the matter, though this could not be independently verified.

Singh said the point of friction between the two pertained to the timing of the company's results and nothing else. "We have been forthcoming with all information. My point to Deloitte all along was that we should not delay results beyond May 30. But they felt it would be inappropriate for them to sign our books of account if all information was not furnished according to their requirement. That was all," he said. 

The Rs 7.1-billion company, founded in 1997 by Singh, markets brands such as Mango Sip and Fruits Up and is popular in the north and western parts of India. The company went public in July 2015 with a Rs 4- billion initial public offering and counts ICICI Prudential Midcap Fund, SBI Magnum Multiplier Fund and Baron Emerging Markets Fund as key institutional investors. Private equity player SAIF Partners has a 17.57 per cent stake in the company, having invested in the firm in two rounds between 2012 and 2014. But this isn't the first time that Manpasand has courted controversy. In December 2016, a brokerage house called 2Point2 Capital had in a blog indicated that the firm had inflated market share and revenue numbers apart not disclosing enough about competing businesses and paying key executives low salaries. 

Singh said his firm had offered a point-by-point rebuttal to the blog back then and that the company had got over that episode. “I would like to put all of this behind me,” he said. “And focus on the business. We have entered into a distribution tie-up with Parle Products, which is for a period of 10 years. That is significant for us and will give us a presence in many more markets.”

Brokerages such as Kotak Equities and Religare Securities have suspended coverage of the stock in the last few days owing to the controversy pertaining to Manpasand's auditing woes.