mm2 Asia directors dismiss ‘going concern’ fears after share price tumble

SINGAPORE (THE BUSINESS TIMES) - There are "no issues and/or concern" with mm2 Asia's ability to operate as a going concern despite an auditor highlighting a material uncertainty in that regard.

This was the opinion expressed by the board of directors of the mainboard-listed entertainment group in a regulatory filing in the early hours of Thursday (July 15), in response to the company's shares tumbling on Wednesday.

mm2 Asia shares closed 11.1 per cent, or 0.9 cent, lower at 7.2 cents on Wednesday, with 142.2 million shares changing hands. The stock was trading down 1.4 per cent at 7.1 cents as at 1.35pm on Thursday.

In its statement, mm2's directors said they wished to highlight that the audit opinion issued by Nexia TS Public Accounting Corporation on Tuesday remains "not modified or qualified", and that the financial statements were drawn up in proper order.

"The directors, based on transparency and good corporate governance, have disclosed the implications of the Covid-19 pandemic and the management actions and plans to address the issue," they said.

"The auditors concurred with the going concern assumptions and the appropriateness of the going concern basis of preparation of financial statements used by management."

In comments published in the company's annual report filed on Thursday morning, mm2 founder and executive chairman Melvin Ang noted that the past year has been a "challenging" one for both the group and the entertainment industry as a whole, remarking that "Covid-19 has sparked massive disruptions in several of our operational segments".

"Nevertheless, the underlying fundamentals of our business remain resilient, as we continue to work towards cementing our position as a leading media and content company," he added.

The group will be holding its annual general meeting on July 30.