The resignation comes at a time when closing of the company’s accounts for FY22 has not been completed. In its statement to the SEC, Azure expressed inability to give a timeline for submission of its annual report on ‘Form 20-F’ for the financial year ending March 2022. “The company reiterates that it is working in close consultation with its advisers to close its annual accounts,” it said.
The original deadline for filing of the annual report with the US Securities and Exchange Commission (SEC) was August 1 and the extended deadline was August 16. In a statement on August 12, the company had said that the delay in filing the 2022 Form 20-F is due to the company’s ongoing review of its internal control and compliance framework.
Such delays have already led to the New York Stock Exchange claim Azure is “noncompliant with quantitative/qualitative continued listing standards or is delayed in filing an annual or interim report required pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934,” as per its website.
So far this year, the stock is down 62%. The company’s current market capitalisation stands at $405.5 million.
Since May this year, the company has also been besieged by a whistleblower complaint alleging potential procedural irregularities and misconduct by certain employees at a plant belonging to one of its subsidiaries. As part of the company’s review of these allegations, it discovered deviations from safety and quality norms. Azure said it has implemented mechanisms to remediate them and is strengthening safety and quality protocols.
“Azure’s audit committee, with the assistance of legal counsel and forensic accounting support, also identified evidence of manipulation of project data and information by certain employees. The company is implementing immediate remedial measures, and Azure is initiating disclosure of the findings to the appropriate authorities,” it said in a disclosure on Monday.
Credit rating agency Moody’s downgraded Azure Power and one of its solar affiliates last week. “Governance risks are material to the rating action. The company has also experienced senior management turnover recently. The internal review and the delay in filing Form 20-F are additional governance considerations material to the rating action,” said Abhishek Tyagi, analyst at Moody’s.
