Auditors resign. There were corporate governance issues like bad reporting of related party transactions including their purchase of medicines from pharmacy subsidiary in erode, canteen operations and parking lot issues with local farmers.
They reported a sudden decrease in revenue and profits and immediately auditor resigns.
Curious. Where were these Corporate Governance issues discussed/mentioned? Auditor’s rotation is a normal practice, if I’m not wrong. It looks like KMCH asked the Auditors permission to rotate early and they agreed. It doesn’t look like the Auditors resigned voluntarily.
Auditors hv been appointed until 2019-20 and what is the sudden urgency to request auditors to resign. Prima facie, the RPT issue raises apprehension whether this has anything to do with the resignation of auditors. Hope all is well.
As far as I heard, the signing partner is going to remain the same. It looks from the signing partner wanted to switch from Haribakthi to some other audit firm (Which will probably be chosen as the auditors). So the terms of the audit hasn’t virtually changed.
It’s all guess work until June 23, when they’ve planned a Board Meeting to fill the vacancy.
Yes, we all hope there is nothing to worry about here…also the sudden increase in depreciation is something I have noticed in many companies which switched to Ind AS for the first time. It could be the same here as well.
Also, to put things into perspective this is a 1000+ bed hospital complex situated on a prime property of 27 acres close to the airport and it generates close Rs 100 per share in cash every year. Promoters added over 1.2% last quarter and are willing to buy block as and when available.
Being in the hot sector this hospital is worth way more than the current price.
However, it is also true that when sentiment takes a hit and panic prevails it takes time for valuations to recover. Some deep pockets needs to come in with conviction to take it up. When that happens you can see multiple upper circuits. Until then just stay with fingers crossed and see what happens on June 23rd :))
All cos face problems at one time or the other and what ultimately matters is how management responds and rectifies things. Hope this works as a wake up call for the promoters to engage the media more and be transparent and set things right if something has gone awry.
It has had a great run from 100 to 1,400 and its time for earnings and corporate governance to catch up.