While JSE-listed Elexir Technology remains confident its new role as an IT reseller will turn its performance around, its former auditor does not share the company`s optimism.
Fisher Hoffman PKF has resigned as Elexir`s auditor after reporting material irregularities within the company to the Public Accountants and Auditors Board.
The auditor reported doubt over the directors` responsibility towards creditors and shareholders.
This is the latest in a continuing battle between Fisher Hoffman and Elexir`s board.
Fisher Hoffman first announced its misgivings in March, resulting in a delay in publishing the interim financial results. The auditor later qualified Elexir`s interim financials released in May.
Although the company had shown some measure of return to profitability, the auditor expressed concern over the Elexir board`s disclosure and announced it believed the company to be technically insolvent.
At the time, Elexir CEO Brett Casey said the directors had given "serious consideration to their responsibilities to creditors and shareholders, and are of the opinion that continued profitable trading enhances creditor claims over the assets of the company and it is therefore their obligation to continue trading in these circumstances".
While the company reached the halfway mark of its financial year showing a R631 000 profit, its current liabilities stand at R20 million, with current assets weighing in at R11 million.
In an announcement to the market yesterday, Elexir told investors it had appointed Russell Bedford Southern Africa as its new auditor.
The new auditor has reviewed the material irregularity reported as well as the directors` reply to the allegations and has deemed their response to be "satisfactory", and says no further action is required.
Elexir reiterated its sentiment that continued profitable trading is the only solution to enhance creditor claims over the group`s assets.
The share, never highly traded, remained static at 3c yesterday.
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