Mamma.com Inc.'s independent auditor has resigned after refusing to sign off on the small Internet search company's financial results for 2004.
PricewaterhouseCoopers LLP stepped aside yesterday, leaving Mamma.com with little chance of filing its year-end results by March 31, as required by securities regulators. Mamma.com's audit committee has begun interviewing potential replacement auditors, the company said in a press release.
Instead of riding the wave of investor enthusiasm for search technology that has made billionaires out of Google Inc.'s founders, Montreal-based Mamma.com has endured a falling stock price and regulatory inquiries.
Shares plunged 32 per cent yesterday, or $2.03 (U.S.), to $4.25, on the Nasdaq Stock Market, after trading was briefly halted.
Last month, The Globe and Mail revealed that the U.S. Securities and Exchange Commission is probing possible links between the company and Irving Kott, a legendary Canadian stock promoter who has a history of run-ins with the law.
Daniel Bertrand, executive vice-president and chief financial officer of Mamma.com, said the SEC requested information last year on any connections between Mr. Kott and the company, and it had complied. The SEC is investigating trading activity in Mamma.com's stock in March, 2004.
Yesterday, Mamma.com said it had begun its own independent investigation into news reports “that an individual and persons acting jointly or in concert with him may have had a controlling influence on the company in the past as a result of undisclosed shareholdings.”
Jennifer Gillard, a spokeswoman for PwC, confirmed that the firm had ended its relationship with Mamma.com yesterday, but said PwC would not comment further.
Guy Fauré, president and chief executive officer of Mamma.com, did not return phone calls.
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