BoAt flags mismatch in financial statements filed with lenders

Consumer electronics maker BoAt that is gearing for an initial public offering (IPO) flagged that the information it shared with the banks did not match its internal records. It highlighted several instances of mismatch between the quarterly returns or statements it filed with lenders and its books of accounts, as mentioned in its updated draft red herring prospectus.

Imagine Marketing, BoAt’s parent company, disclosed that the auditors had flagged several “unfavourable remarks and observations” over the years. The mismatch pertained to fiscal years 2023, 2024 and 2025. The auditors raised concerns over utilisation of funds for different purposes than what they were meant for.

The IPO prospectus of the company has also come under intense scrutiny on social media with questions being raised about the unreported transactions that were made into Singapore-based Kaha Pte Ltd subsidiary through another unit or the excess remuneration paid to its directors in the financial year 2023.

“What is wrong with many startups doing an IPO? They need to set standards and not do funny accounting,” criticised Mohandas Pai.

The company said it has taken steps to rectify some of the observations including “obtaining a waiver, through shareholders’ resolution for the excess remuneration paid to directors of our company and ensuring that accurate numbers are reported from the current financial year to minimise the differences between the books and returns”.

Meanwhile, co-founder and face of the company, Aman Gupta, has moved to a non-executive director, while co-founder and CEO of Imagine Marketing, Sameer Mehta, moved to the role of executive director.