KPMG raises concerns about going status of Federal Palace’s parent firm

Tourist Company of Nigeria’s going status may be in concern going by a notice to the company sent to the Nigerian Stock Exchange today.

The firm stated that it would be unable to release its audited financial statements for the period ended December 30, 2018, as at when due.  

Companies have a 90-day deadline to submit audited results. The firm expects to file the results in question, by the 30th of April, 2019.

Reasons behind the delay: The company’s auditors KPMG Professional Services, has without qualifying its opinion, including a material uncertainty relating to the going concern status in its audit opinion.  

kpmg will send a copy of the financial statements approved by the tcn board together with an explanatory memorandum to the financial reporting council of nigeria (frcn). the results will be filed consequent upon approval by the frcn.  

Why is KPMG doing so ?: Section 8 of the FRCN  Act of 2011, states that the Council shall receive copies of all qualified reports together detailed explanations of such qualifications from the company’s auditors. The statements are not to be released until all accounting issues are resolved by the FRCN.  

In a dire state  

The company’s results for the nine months ended September 30, 2018 show revenue was relatively flat year on year at N1.05 billion. Loss before tax, however, dipped slightly from N1.1 billion in 2017 to N897 million in 2018.  

Even more, worrisome however is that the company had negative equity of N11.1 billion, with liabilities outweighing assets. 

What led to this?  

The company has struggled in the last decade for several reasons.  

An ownership squabble among the Ibru family has been on for several years. Maiden Ibru, the wife of the late Alex Ibru, had alleged that the company borrowed various sums: $7.1 million, N610 million, N381 million, and N19 million, between 2003 and 2004 which had not been paid back. She thus sought a court order for the winding up of the firm. 

Investigations by the Economic and Financial Crimes Commission (EFCC) resulted in the brief detention of some Sun International staff and the withdrawal of a planned $450 million investment. 

Sun has decided to sell its stake once investigations are over.  

The Tourist Company of Nigeria Plc was incorporated on 10 April 1964. The Company converted from a private company to its current form on 20 April 1994. The company owns the popular Federal Palace Hotel and Casinos.

 The stock last traded on the Nigerian Stock Exchange on the 5th of March, 2019 at N3.50.  

Source:Nairametrics

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