Independent auditors issue disclaimer of opinion on Eagle Hospitality Trust finances

INDEPENDENT auditors KPMG have issued a disclaimer of opinion in respect of the financial statements of Eagle Hospitality Trust (EHT), which released the independent auditors' report on Friday, after market close.

EHT is a stapled group comprising Eagle Hospitality Real Estate Investment Trust (EH-Reit) and Eagle Hospitality Business Trust (EH-BT).

The auditors had been tasked to audit the financial statements of EH-BT, EH-Reit and its subsidiaries, and of EHT. The audit covered their respective financial positions as at Dec 31, 2019, and their fund movements from April 11 till that date.

In the report dated Aug 14, the auditors said that they "have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements".

"Accordingly, we do not express an opinion on the accompanying financial statements of EH-BT and consolidated financial statements of EH-Reit Group and EHT."

The auditors noted many key events related to ongoing disagreements between EHT and its sponsor Urban Commons, whose units are master lessees of EHT's investment properties.

Given the potential impact of these events, there are "multiple uncertainties" that would affect the going-concern assumption underlying the preparation of the financial statements, said the auditors.

"Accordingly, we are unable to satisfy ourselves on the appropriateness of the managers' preparation of the financial statements of EH-BT, the EH-Reit group and EHT on a going-concern basis, the completeness of related-party transactions identified, and the completeness of liabilities recorded and/or disclosed by the EH-Reit group and EHT."