Mutares' accounts being audited by German financial authority, shares fall

(Reuters) -The 2023 financial statements and management report of German holding company Mutares are being audited by the federal financial authority BaFin which said on Friday it has evidence of accounting errors.

Shares in the company were down around 14% by 0702 GMT, having risen 26.5% up to the previous session's close this year.

BaFin said it initiated its audit at the end of July and had "concrete evidence" Mutares violated accounting regulations.

Mutares said it welcomes the review but is convinced its accounting has been carried out properly and legal requirements met.

BaFin said the information Mutares provided on the remaining maturity of receivables from affiliated companies may be incorrect.

The regulator also said Mutares' management report may be "incomplete" when it comes to the company's future economic outlook.

In its statement, Mutares said that in its balance sheet all receivables had a contractually agreed term of less than one year.

"The wording in the notes stating that some of the receivables may not be collected until after 12 months referred to uncertainties in the restructuring progress of individual portfolio companies," the company said.

It also criticised the statement that its expectations may be incomplete, saying it believes the most significant financial performance indicators "have been fully forecasted".

Both the annual financial statements and its accompanying management and group management report were audited by Deloitte GmbH, Mutares said.

The news comes after Mutares in April had been unable to publish its audited 2024 financial statements by the Deutsche Börse deadline due to a prolonged disagreement with Deloitte over how to account for a bankrupt Swedish subsidiary.

As a result, the company’s shares had been temporarily removed from the SDAX small-cap index.

(Reporting by Marleen Kaesebier and Cian Muenster in Gdansk and Alexander Huebner in Munich;Editing by Elaine Hardcastle)