Deloitte flagged issues in internal controls of parent company of popular news app
Deloitte , has flagged issues in the internal controls of the parent of Dailyhunt and Josh for the financial year ended March 31, 2024, stating that these "material weaknesses" could potentially lead to misstatement in accounting aspects including operating expenses, trade payables and expense account balances. Deloitte’s findings are part of the unlisted company’s financial statement for fiscal 2024. In the filing made with the Registrar of Companies, the audit firm said VerSe did not have appropriate internal controls over the selection and evaluation of suppliers, approval of purchase orders and invoices, as well as payments. The Bengaluru-based VerSe Innovation, which has raised over $2 billion in funds since being founded, is backed by the likes of Canada Pension Plan Investment Board (CPPIB), Ontario Teachers' Pension Fund, Uday Shankar and James Murdoch's private investment firm Lupa Systems, Z47 (formerly Matrix Partners) . It last raised $805 million in a funding round led by CPPIB in 2022, valuing it at nearly $5 billion.
In response to the auditor’s remarks, VerSe said the company was strengthening its processes by conducting a “detailed workshop on the best practices and checklists” that would be followed by all the relevant personnel. The company said it would create an “end-to-end order to cash process via a well-documented framework encapsulating supplier selection, approval process, invoicing and payments as per the DOA (delegation of authority”. While Deloitte identified certain internal control weaknesses, their report has clearly confirmed that these do not impact their opinion on the consolidated financial statements which is true and fair. It added that it was committed to strengthening internal controls and plans to achieve break-even in the second half of ongoing fiscal.
Deloitte said it did not audit the financial statements of eight subsidiaries, whose financial statements reflect total revenue of Rs. 793 crore in FY24.
Last year the company acquired digital marketing solutions firm Valueleaf Group in a cash-and-stock transaction. It has acquired several companies, including New York-based digital magazine store Magzter, to enhance its portfolio with premium English language content. VerSe was founded by Virendra Gupta with former Facebook India managing director Umang Bedi joining in as president in 2018. Bedi was designated as a cofounder subsequently.
