TORONTO — In its first public move since launching a strategic review in December following the discovery of alleged misrepresentation of certain financial information by its former chief financial officer, Kew Media Group announced Wednesday its auditors, Grant Thornton LLP, are withdrawing a number of reports from recent years.
In a news release, Kew Media said Grant Thornton notified the company it has withdrawn the following reports: its audit report dated April 2, 2018 on the company’s consolidated financial statements for the years ended December 31, 2017 and 2016; its audit report dated April 1, 2019 on the company’s consolidated financial statements for the years ended December 31, 2018 and 2017; and its interim review reports to the audit committee of the company for each interim period within the 2017, 2018 and 2019 fiscal years. As a result, the Grant Thornton reports now withdrawn for those fiscal years should no longer be relied upon, Kew Media said in the release.
Grant Thornton informed the company that the withdrawal of the reports is a result of the actions of Kew’s former CFO, Geoff Webb, and its inability to rely on representations he made to Grant Thornton in the course of its audits and review of Kew’s financial statements, the release says.
In December, Kew Media announced it was forming a special committee to undertake a strategic review process, and the company now says it has formed a second special committee of independent directors to investigate the actions of Kew’s former CFO. This second committee’s mandate includes an investigation of the extent to which working capital and other financial information was misreported to the company and its senior lenders, and whether the company’s historical financial statements were impacted by such inaccurate information and require any amendment or restatement.
As a result of Grant Thornton’s withdrawal of its reports and the time expected to complete the committee’s investigation, Kew Media now says it expects it will not be able to meet the filing deadline for its financial statements for the year ended December 31, 2019.
Kew Media’s share price fell more than 13% on the day to $0.69, and is well below it’s 52-week high of $7.38, which came in April.
Kew owns thousands of hours of TV and film content, having purchased production companies such as Bristow Global Media and Frantic Films, among others.
