The independent auditor of MM2 Asia, a Singapore-based mini conglomerate with entertainment interests across East Asia, has raised doubts about the group’s ability to continue as a going concern.

Reporting on mm2 Asia’s annual report for the year to March 2021, Nexia TS Public Accounting Corporation noted a “material uncertainty” regarding the group’s ability to continue as a going concern.

The auditor’s doubts flowed from mm2’s net loss in the 2020-21 financial year and from liabilities exceeding assets, according to a statement to the Singapore stock exchange filed by mm2.

In May, mm2 revealed losses of S$99.5 million ($73.4 million), compared with a profit of $$6.29 million ($4.64 million) in 2019-20. On March 31, 2021, net current liabilities exceed current assets by $119 million ($87.8 million), compared with S$8.43 million ($6.22 million) a year earlier.

On Tuesday, Mm2 also issued a notice of material revisions to its previous financial statement. Among the revisions was a S$2 million goodwill impairment at its Malaysian cinema operation.

The group has operations spanning film and TV production, post-production and cinema operating in Malaysia and Singapore. It acquired Singapore cinema chain Cathay Cineplexes in late 2017, having failed in a bid for the country’s cinema leader Golden Village.

In December 2020, mm2 said that due to the impact of the coronavirus pandemic, it had begun talks concerning a possible merger of the Cathay Cineplexes and Golden Village businesses in Singapore.

The exhibition industry in Singapore was hit by mandatory COVID-related closures in 2020. The Singapore government has since allowed cinemas to reopen but offered operators a choice between mandatory testing of patrons or strict capacity cuts. In Malaysia, where coronavirus infections are on the rise again, cinemas have been closed for long periods.

In February, mm2 revealed that it had been approached by a private equity investor which sought to buy a minority stake in the group. It said that the mm2 board was discussing the approach, but there has been no update on the negotiations nor whether the auditor’s findings might change the investor’s approach.

In May, executive chairman Melvin Ang said: “We firmly believe that the worst is almost over. We are confident that with tenacity, clear-mindedness, cost controls and discipline, we will be able to overcome the current headwinds to our businesses.

“Furthermore, we will continue to expand into non-Chinese content markets, e.g. Thailand and South Korea, by utilizing our competency and methodologies that have performed well in the Chinese content markets,” Ang said.

Mm2 has not responded to Variety‘s requests for comment.