Deloitte to quit as Adani Ports' auditor after flagging concerns

Last updated: 12 August 2023


Deloitte has decided to resign as the auditor of Adani Ports & Special Economic Zone Ltd. The decision appears to be linked to concerns over certain transactions highlighted in a report by Hindenburg Research. These transactions raised concerns that Deloitte reportedly did not wish to independently investigate. This development reinforces the concerns over the accounting practices and governance of the Adani Group, as well as the ongoing impact of the allegations made by Hindenburg Research

Deloitte to quit as Adani Ports  auditor after flagging concerns

Key highlights from the current report regarding Deloitte's resignation as the auditor of Adani Ports & Special Economic Zone Ltd.

1. Auditor Resignation

Deloitte Haskins & Sells LLP, the auditor of Adani Ports, is reportedly planning to resign. The resignation has not yet been formally announced but is expected to be made public in the coming days. This move adds to the existing concerns about the accounting practices of the Adani Group.

2. Previous Concerns

The Indian unit of Deloitte had previously raised concerns in May about certain transactions between Adani Ports and three other entities that Adani claimed were unrelated parties. The auditor expressed an inability to verify these claims and determine the company's full compliance with local laws.

3. Corporate Governance and Scrutiny

The planned resignation of the auditor casts a fresh spotlight on the corporate governance practices of the Adani Group. This development occurs just before the Securities and Exchange Board of India (SEBI) is expected to release the results of its investigation into the allegations made by Hindenburg Research, which had accused the Adani Group of accounting fraud and market manipulation.

4. Response from Adani

The Adani Group has consistently denied any wrongdoing and asserted its compliance with Indian laws. A panel appointed by India's Supreme Court did not find any regulatory failure or indications of stock price manipulation.

5. Previous Auditor Resignations

The situation is not unprecedented, as there have been previous instances of auditors expressing reservations about the financials of Adani Group companies. Notably, a member of KPMG resigned as co-auditor of Adani Green Energy in 2021 amid increased scrutiny of India's accounting industry.

6. Financial Impact 

The allegations and controversies surrounding the Adani Group, including the Hindenburg Research report, had led to a significant drop in market value (over $150 billion) for Adani's listed companies. The group has since taken steps to recover, including fundraising and refinancing efforts.

Join CCI Pro

Category Audit   Report

  16170 Views

Comments



More »