Embattled NZ Automotive Investments has been hit with another setback, as its external auditor has bolted for the exit.
The company, which owns the 2 Cheap Cars used car chain, says Grant Thornton has resigned with immediate effect. Photo: Facebook / 2 Cheap Cars
The company, which owns the 2 Cheap Cars used car chain as well as an associated finance operation, said that Grant Thornton had resigned as the company's auditor, effective immediately.
"Grant Thornton will co-operate with the incoming auditors as appropriate to ensure a smooth transition," NZAI said in a brief statement to the stock exchange.
The company said its directors would begin the process of appointing a new auditor once the board had been reconstituted on 21 August.
NZAI's board has been in disarray after three independent directors resigned abruptly last month alleging they did not trust, nor could they work with the company's major shareholders and executive director, David Sena, who had moved to have them replaced at the annual meeting in September.
Sena responded, saying that the directors needed to be replaced by people able to turn the company around and improve its profitability.
The regulatory arm of the NZX has since waded in to the conflict, asking the company to explain how it would have the required number of independent directors, and to explain how potential directors nominated by Sena could be classified as independent.
Earlier this month, NZAI said that it was at risk of losing its financial backing because of its boardroom ructions.
The company was told by the bank, which supports its finance and insurance operations, that it would not give any assurance it would continue once the current contract expires.
NZAI had an $8 million bank trade facility, which it used to finance the purchase of used cars, which it had fully drawn and it was due to expire at the end of the year.
It said it had another facility of $6m used for motor finance, of which it had used $4m, which will run until early 2024.