KPMG has resigned from its role as independent auditor to Triterras, amid accusations that the Singapore-based fintech misled investors over transactions on its blockchain platform Kratos.
In a filing to the US Securities and Exchange Commission (SEC), Triterras says it received formal notice of KPMG’s resignation on January 20.
The filing does not give a reason for the decision, but in a separate statement Triterras says that “for some time, there has been consideration and discussion with respect to replacing the independent accountants of the company for various considerations”.
The only reason outlined in that statement is an attempt to separate the operations of Triterras from Antanium, previously known as Rhodium Resources. Rhodium founder and director Srinivas Koneru is also founding CEO of Triterras.
“The company is in discussions regarding the engagement of another independent accounting firm of international repute,” its statement adds.
“The company maintains a positive view of the future and is optimistic on the current management growth initiatives underway.”
The filing says Triterras and KPMG did not disagree on any matter relating to accounting principles or practices, and that there were no reportable events not already disclosed to the regulator.
The accounting firm says in a separate letter to the SEC that it agrees with all statements that refer to KPMG, and is not in a position to agree or disagree with other comments from Triterras.
Nasdaq-listed Triterras has faced growing pressure over transactions conducted over its blockchain-based trade finance platform Kratos, after it disclosed in a December SEC filing that Rhodium was in financial difficulty.
In response, several law firms filed class action lawsuits on behalf of Triterras investors, alleging that the company’s reliance on Rhodium had been understated.
The situation worsened for Triterras on January 15, when a detailed short seller report from Phase 2 Partners, a San Francisco-based hedge fund, alleged that nearly two-thirds of transactions on the Kratos platform involved companies with ties to company directors.
Phase 2 says transaction data from the Ethereum blockchain, which underpins the Kratos platform, shows Rhodium and Longview Resources – a trading firm founded by Rick Maurer, who is also CEO of the special-purpose acquisition company (SPAC) that owns Triterras – accounted for a far higher proportion of trades than disclosed to investors.
The report also alleges that once Rhodium fell into distress, the number of active participants on the platform fell from several dozen to just four.
Triterras denies those claims, saying the data extracted by Phase 2 is “stale and also contains numerous errors” and that it suspects “unauthorised access to the company’s data”.
Its statement this week says it has launched an “independent investigation” that aims to “address and rebut” the allegations made by that report. The investigation will be overseen by its board of directors’ audit committee.
“The audit committee is in the process of selecting the legal counsel that will conduct the investigation into the blockchain, related party transaction[s] and other accusations made,” it says.
“The undertaking of this investigation by an independent third party is enthusiastically supported by the company’s CEO and executive management, and the company expects this review to set the record straight regarding the false and/or incomplete information included in the recent short report.”
Meanwhile, Triterras’ rating was last week downgraded to “market perform” by Northland Capital Markets following its SPAC investor conference.
Northland analyst Mike Grondahl cited a “lack of clarity on a couple of issues” and a potential wait of more than two months before its formal financial results are filed in May.
A link to the audio from that conference was initially made available through Triterras’ website, but as of press time, has been removed. A company spokesperson did not respond when contacted by GTR.