The company had posted a net profit of Rs 20.54 crore during October-December period of the previous fiscal, HT Media said in a regulatory filing.
Total income declined 37.64 per cent to Rs 391.65 crore as against Rs 628.05 crore in the year-ago period.
HT Media said the company had received a whistleblower complaint in August 2020 from a named employee of the radio business on his last working day.
The complaint alleged anomalies resulting in deficiencies in certain financial reporting processes of the radio business of the group, the company said, adding that it appointed an independent law firm which worked closely with two independent accounting firms for an in-depth comprehensive review.
HT Media said the investigation brought out practices indicating deficiencies and lapses during financial years 2017-18, 2018-19, 2019-20 and 2020-21 such as the practice of pre-billing (billing and booking revenue for services yet to be consumed/ delivered) resulting in reporting of higher revenue in financial results.
The probe also found potential manipulation of debtor ageing by issuance of inappropriate credit notes and additional invoices to avoid higher provisioning for bad debts and circulating improper balance confirmation requests (by including invoices without delivery/ requests for advertisement) to customers (with such balances either remaining unconfirmed or disputed) resulting in higher revenue, it said.
HT Media said based on the probe, the investigating team and the management concluded that the findings were confined to a stream of revenue of radio business of a subsidiary only and were not pervasive across other financial statement captions.
The investigation did not reveal the existence of any personal profiteering or siphoning off funds or embezzlement or misappropriation of funds.
The final findings of the investigation have been presented to the Audit Committees and Board of Directors of the company.
The management has also placed before Audit Committees an action plan for strengthening internal financial controls and systems, centralizing the revenue assurance function.
Besides, the management has placed before the committees a plan for integration of IT systems used in the radio business and recommendations from Chief HR Officer to bring about changes in HR policies and practices with emphasis on adoption of better ethical codes and practices, HT Media said.
The Audit Committees have also made their recommendations for action against the employees involved in the wrongdoings to the respective Board of Directors for their consideration, the company added.
HT Media said the Board of Directors has considered and accepted the said investigation report and is in the process of taking appropriate steps in the best interest of the Group and its various stakeholders.
Shares of HT Media were trading 2.56 per cent higher at Rs 18 apiece on BSE.