Deloitte to Quit ‘Adani Ports’ Audit due to Hindenburg Reports

Deloitte Haskins & Sells, the auditor of Gautam Adani’s ports business, plans to resign amid concerns over accounting quality. The revelation could escalate worries about the accounts of the Indian conglomerate, which Hindenburg Research has previously targeted. According to insiders, Deloitte indicated its plans to resign to Adani Ports & SEZ Ltd. The firm had voiced concerns in May  2023 about transactions between Adani Ports and three separate entities, which Adani asserted were unaffiliated parties. Deloitte stated that it could not validate these assertions or ascertain full compliance with local regulations.

Deloitte to Quit 'Adani Ports' Audit due to Hindenburg Reports

The impending resignation takes center stage on the governance of Adani’s empire shortly before the SEBI delivers its findings on the investigation into Hindenburg’s allegations of accounting fraud and market manipulation against the group. Adani consistently denies any misconduct. An Indian Supreme Court-appointed panel discovered no regulatory failures or stock price manipulation. Deloitte might be replaced by audit firm MSKA & Associates, an associate of BDO India LLP.

This isn’t the first case of an auditor expressing discomfort with Adani’s companies. Ernst & Young’s member firm, S.R. Batliboi, recurrently released qualified views on financials of Adani Power Ltd. Meanwhile, a KPMG member resigned from co-audit of Adani Green Energy in 2021 and declined to conduct audit of some other Adani Group companies amid intensified supervision of India’s accounting sector.

Despite the controversies, the Adani Group maintains its compliance with Indian laws and is open to a SEBI investigation. The Hindenburg allegations had once wiped over $150 billion from the market value of Adani’s listed companies. However, the conglomerate recently announced fresh fundraising plans, raised substantial funds from GQG Partners and Qatar Investment Authority, and pursued refinancing with global banks in a bid to recover and restore normal operations.

Source: HT dated 13/08/2023


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