SES Imagotag board backs chairman as company's value halves
SES Imagotag shares close down 58.3%
Under pressure from report by Gotham City
Board has rejected Gotham City's allegations
Renews mandate of its chairman
Updates with KPMG response in paragraph 7, updates shares paragraph 9
By Mathieu Rosemain and Olivier Sorgho
PARIS, June 23 (Reuters) -SES Imagotag SESL.PA's board renewed the mandate of Chairman Thierry Gadou on Friday, a day after a short-seller report hit the French digital labels company, sending its shares down by more than 50%.
The board's support for Gadou, who is also CEO and SES Imagotag's second-biggest shareholder, came after the group held its annual shareholders' meeting, SES said in a statement.
"Following the General Meeting, the Group’s Board of Directors met and renewed the mandate of Mr. Thierry Gadou as Chairman of the Board," the company said.
Shareholders approved all draft resolutions presented by the company, SES said, including the renewal of KPMG and Deloitte as the company's auditors, which had certified SES's 2022 accounts.
Hedge fund Gotham City Research's report on Thursday said it believed SES Imagotag's financial statements were "materially misleading, incorrect, and deficient".
The group's board rejected Gotham City Research's allegations.
Deloitte declined to comment. KPMG said it had a policy of not commenting on its clients.
SES Imagotag's shares were halted on Thursday and the company requested they be suspended. Trading resumed shortly after the market opened on Friday after a brief halt due to the magnitude of their fall.
The shares fell by 58.3% at the close of trading, marking theirlargest one-day decline on record.
SES Imagotag was among the strongest performers this year on the French market. Its value had increased almost fivefold over the last five years. Its market capitalisation stood at around 2.65 billion euros before Gotham City's report, based on Refinitiv data.
Before the report was published, SES Imagotag traded at 139 times average earnings, compared with a ratio of 14 for the broader SBF 120 stock market index, which SES Imagotag is part of.
Reporting by Mathieu Rosemain and Olivier Sorgho;
Editing by Amanda Cooper/Jane Merriman/Sudip Kar-Gupta
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