SSL Ventures gets cash boost, resolves accounting issues
Published:Friday | October 4, 2019 | 12:20 AM
SSL Venture Capital Jamaica Limited, which trades as SSL Ventures, says the issues relating to its accounts that led to its suspension on the stock exchange, are now resolved.
Auditors Baker Tilly Strachan Lafayette previously completed a 12-month assessment of activities at the firm, but was also asked to do a reassessment of the initial six months, July-December 2018, to clear up the qualifications to its audit for that period.
“Our auditors have now given us a clean bill of health for the audit period July 2018 to June 2019,” according to a note from newly appointed CEO Zachary Harding that accompanied SSL Ventures’ newly released financials.
Under the audit, SSL Ventures made a net loss of $76 million or more than three times heavier than the $21-million loss a year earlier.
Baker Tilly’s only commentary in the audit related to the company’s net losses and its ability to continue as a going concern – a standard statement given by auditors for loss-making entities.
Despite SSL Ventures current losses, the company increased its cash flow to $19 million from $33,500 a year earlier. The rise resulted from the $148 million pumped into the company by a related entity.
Harding said the company’s profitability was affected by issues related to compliance and actions to address the accounting standards for its start-up associated companies.
“The business went through tremendous stress during the period under review, as most of the year was focused on issues raised during the prior audit and to ensure compliance and implementation of systems and control procedures to prevent a reoccurrence of those issues,” said the company.
Trading in SSL Ventures shares was suspended on June 24, 2019, while the company resolved its accounting issues. The suspension was initially to be lifted on August 15, but was still in effect up to Thursday.
In June, SSL Ventures advised that during the period of suspension it would resolve the issues raised by its auditor and address the breach, implement appropriate policies and procedures to ensure that these issues do not recur, and submit a modified or restated report that was in compliance with International Financial Reporting Standards and the JSE Junior Market Rules.
SSL Ventures listed on the JSE in 2018 following the reverse takeover of cash-strapped music publisher C2W Music Limited. It subsequently acquired stakes in three start-ups. Baker Tilly, in its initial audit, said in relation to the $107.5 million of goodwill booked by SSL for the investments, it could not sufficiently test the fair value of that line item.
Former head of the company Mark Croskery demitted office last month and Harding took the helm. That change was preceded in February by the departure of Drew Gray, a vacancy that Croskery had filled.
SSL Ventures grew revenue from half-million dollars in 2018 to $332 million in 2019 from a series of acquisition of smaller companies.
“We are confident that we have in place the relevant systems, internal control procedures and competent management to build on our success,” the company stated.