Singapore fintech Triterras has disclosed that its previous auditor, Nexia TS, raised doubts over whether its sales transactions or trade receivables were valid. 

Triterras, which operates blockchain-based trade finance platform Kratos, says in a filing with the US Securities and Exchange Commission (SEC) that Nexia “had a disagreement with the company on the auditing scope and procedures” related to its results for the financial year ending February 2021. 

“The disagreement related to the sufficiency of audit evidence over the validity of certain sales transactions and thereon the existence and valuation of trade receivables,” Nexia says in a letter cited by Triterras in the filing. 

The letter has not been made publicly available and Nexia did not provide a copy when contacted by GTR 

The filing follows Nexia’s resignation as Triterras’ auditor on January 7. The decision to step down was taken after Triterras took legal action against Nexia, issuing a letter of demand in response to delays in its completion of the audit. 

Triterras says its management and board “continue to believe and assert that there was no disagreement with Nexia regarding audit scope or procedures because Nexia did not propose additional procedures or an expanded scope of work that would have facilitated the completion of Nexia’s audit”.  

“Further, the company does not agree with Nexia’s characterisations related to ‘audit evidence’,” it adds. Triterras did not respond when contacted. 

The news comes as the fintech faces the immediate prospect of having its securities removed from the Nasdaq stock exchange. 

Nasdaq has already informed the company that it will be delisted due to delays in filing audited financial results. Triterras has appealed that decision and is due to appear before a Nasdaq hearings panel on January 20. 

Following Nexia’s resignation, Triterras announced that California-based firm WWC PC has been appointed as its new auditor. 

It is the third company to have taken up the role in little over a year, following the resignation of KPMG last January – a decision Triterras says was taken to distance the firm from former sister company Rhodium Resources. 

Throughout that period, Triterras has faced questions over the nature of the transactions taking place on its platform. 

In December 2020, the company sparked an investor backlash when it disclosed that financial difficulties at Rhodium could impact on its business, despite efforts to separate the two entities. 

The following month, short sellers alleged that a higher proportion of transactions were linked to Rhodium, or to fellow founder company Longview Resources, than had previously been disclosed to investors – accusations Triterras continues to deny. 

However, the company has not issued any information about transaction volumes or values taking place after August 2020 – the same month Rhodium received its first letter of demand for payment from a creditor. 

GTR has since revealed that blockchain records detailing thousands of Triterras transactions from 2019 and 2020 are publicly visible, and show activity involving several related companies. Triterras has declined to comment on specific findings but refutes the accuracy and completeness of the data found. 

It has also emerged from court documents and corporate registry data that some of the companies active on the platform fell into financial difficulties in 2020. 

Srinivas Koneru, Triterras’ founder and chief executive, told analysts in October 2020 that as of August that year, the platform had hosted more than 4,500 transactions worth more than US$8.8bn.  

Six months earlier, he told GTR that Triterras had captured “about US$3.5bn-worth of trade transactions on the Kratos platform, with Rhodium Resources, which is part of the Triterras group, capturing about US$2bn”.