Auditors for SsangYong Motor Company (SYMC) have refused to give an opinion on its half-yearly performance.
During the first quarter of this fiscal, the group incurred an operating loss of 98,634 million won and a net loss of 193,537 million won.
Auditors KPMG Samjong Accounting Corp had then said that the group’s current liabilities exceed its current assets by 589.87 billion won and that these conditions indicate that a material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern.
This comes at a time Mahindra & Mahindra has decided to bring down its stake in the auto company to less than 50 per cent. The board had agreed to seek shareholders consent by way of a postal ballot. This would be a way to induct potential investors into SYMC or to otherwise meet its funding requirements through other sources.
M&M had recently indicated that it is not ruling out the possibility of ceding control over SYMC in full or in part.
Mahindra had acquired SsangYong in 2010 but has failed to turn it around.
According to M&M’s annual report for 2019-20, as of March 31, 2020, its investments in SYMC stood at Rs 2,450 crore while its ownership interest was at 74.65 per cent.
In April this year, the board of M&M had rejected a proposal to inject any fresh equity into the Korean arm. The management and labour union of SYMC had sought a funding of $406 million from M&M over the next three years.
