UPDATE 1-Emerson Radio profit rises; delays filing
(Recasts, adds CFO appointment, other details)
Feb 21 (Reuters) - Emerson Radio Corp. (MSN.A) reported a rise in quarterly earnings, but said it would delay filing the results with regulators after an internal review raised doubts over its financial dealings with a major shareholder. The consumer electronics company, which reported third-quarter earnings of 14 cents a share against 5 cents a year ago, said the transactions with Grande Holdings Ltd. revealed material weaknesses in Emerson's internal controls.
The company had issued loans under its credit facility to Grande and the review found that the terms were not made on substantially the same terms as those prevailing at the time for comparable transactions, Emerson said.
The company could now be deemed in breach of certain covenants contained in its credit facility, it added. They included restricting it from lending money and entering into related-party transactions without the consent of the lender.
Emerson also said it appointed Greenfield Pittsto, a director since March 2006, as chief financial officer. (Reporting by Savitha Kalyanaraman in Bangalore)
