Tech group Solutions 30 considers delisting in spat with accountants

·2 min read

By Sudip Kar-Gupta and Matthieu Protard

PARIS (Reuters) -Technology services company Solutions 30, whose business practices have been criticised by hedge fund Muddy Waters, said on Friday it could delist its shares and that accountants EY had not signed off its accounts.

Solutions 30, whose shares have been suspended from trading since May 10 and is under pressure from France's financial regulator to publish its 2020 audited results, said it was considering appointing new auditors.

"The group’s annual report will be published after receiving EY’s final audit report. As a result, the company is still unable to provide a precise timetable for the publication of this report," Solutions 30 said in a statement.

Any possible issues at Solutions 30 could hit both institutional investment firms and many private French retail investors, who hold shares in the company.

The company, which has corporate headquarters in Luxembourg and shares listed in Paris, said it planned to hire investment bankers to find long-term shareholders.

"The project, which the company does not intend to comment on beyond its legal obligations to do so, could go as far as a delisting", said Solutions 30, which added its shares should resume trading on May 24.

Solutions 30's Chief Executive Gianbeppi Fortis, asked if the company could also consider a sale or merger with a rival, replied to reporters that "all options are open."

Despite accountants having not signed off its accounts, the company confirmed its 2020 financial results released on April 28, with revenue up by 18%.

Officials at EY Luxembourg could not be immediately reached for comment, but the accountancy firm told Reuters earlier in the week that it could not comment on the situation due to client confidentiality.

Hedge fund Muddy Waters Research - which has a 'short' position betting on a fall in Solutions 30's shares - said the issue over the accounts raised questions.

"It is obvious to us that EY found serious issues in its audit of Solutions 30's 2020 financial statements," said Muddy Waters founder Carson Block.

Solutions 30, which has a stock market value of around 1.1 billion euros ($1.34 billion), said in January it had decided to file a defamation suit over criticism made by Muddy Waters regarding its business practices.

Muddy Waters said it had not been served notice of any defamation suit against it by Solutions 30.

Solutions 30's website says the company has more than 11,000 service engineers who handle tasks such as cable installations and general technical support.

($1 = 0.8214 euros)

(Reporting by Sudip Kar-Gupta and Matthieu Protard, editing by Louise Heavens, Emelia Sithole-Matarise and Susan Fenton)

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