/me puts on tinfoil hat. I'm a small fish who bought into EHH as a means to get in on the ZNO action.
My read is: a) China operations are material, if not the majority of operations. Hence why due to reporting/accounting irregularities for the Eagle Don entity , the auditor refuses to sign off. It means that things are so bad, that the auditor is entirely unwilling to provide *any* opinion, or does not believe it can sign off in any form and still meet their ethical obligations.
If the irregularities were small, the auditor would provide an opinion that includes 'doubtful assets/debts' and apply some valuation methodology.
b) The extent of interference to the external/independent audit of Eagle Don is insane. It isn't someone trying to be helpful to speed up the audit by helping translate documents - it is someone willfully interfering.
c) There is also the possibility of interference from the Chinese government. Specifically with goods imported for sales within China, during the COVID period, where the government may have _appropriated_ materials in an emergency to fight COVID. This may particularly apply to the ZNO product it became a reseller for. I have concerns that the stock on-hand will not match the books, and that the person(s) intefering with the audit will interfere with efforts to conduct a limited stock count, let alone a substantive one if the auditor deems Eagle Don's inventory controls to be lacking.
d) In hindsight, EHH looks very much like a Chinese company with questionable practices using an Australia Non-Exec Chairman (Andrew) to whitewash their reputation.
e) I'm also disappointed that Henko Vos, the company secretary, who is also Director of Audit and Assurance and Corporate Advisory at Nexia Perth , has participated in or allowed this to happen in a company that he has involvement in. This may warrant some sort of notification to the relevant governing bodies of public accountants and accounting professionals.
EHH Price at posting:
14.0¢ Sentiment: Sell Disclosure: Held
