December 2, 2014 / 4:30 AM / 5 years ago

MOL Global shares tumble on Vietnam accounting glitch, profit slump

(Reuters) - Shares in MOL Global Inc MOLG.O, the first Malaysian company to list in the United States, fell more than 60 percent on Monday after the online payments company reported accounting errors at its Vietnam unit and a 61.5 percent fall in net profit.

The company, majority owned by billionaire Vincent Tan and the sultan of the Malaysian state of Johor, is now trading 80 percent below the price it listed at on Oct. 10. It is also facing two class action lawsuits from investors who said they had been misled by its listing prospectus.

MOL said the Vietnam unit initially overstated revenue and direct costs slightly. The error, though, will add to investors’ worries about the company after the departure of Chief Financial Officer Allan Wong last week and a delay to its results announcement.

“It’s a perfect storm that resulted in a delay in our earnings result,” Chief Executive Ganesh Kumar Bangah said on an analyst conference call.

“We hope we get up and are able to basically continue to deliver on the promises we have set forth in our prospectus and to our investors.”

MOL’s shares were halted on Nov. 24 after falling more than 50 percent when the company said Wong was leaving, a departure the company stressed was for personal reasons.

The eventual release of its results on Monday offered little respite to investors, showing that the profit attributable to shareholders fell 61.5 percent to 3.0 million ringgit ($0.88 million) in the three months ended Sept. 30.

The company blamed the fall on the “rapid” shift in gaming habits of consumers who are now playing more games on their smartphones rather than online.

“This decrease was further compounded by technical delays in introducing and monetizing new mobile games on the Company’s platform,” MOL said.

The company, also known as Money Online, is one of the largest e-payment enablers for online goods and gaming in Southeast Asia by payment volume.

Deutsche Bank AG (DBKGn.DE), which helped MOL to go public, suspended its research coverage on the company last week, citing the delay in reporting third-quarter results and the departure of the CFO. Its analysts have not said anything further since the results release.

Reporting by Tanya Agrawal and Avik Das in BENGALURU and Rachel Armstrong in SINGAPORE; Editing by Ted Kerr, Saumyadeb Chakrabarty and Christopher Cushing

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