Deloitte has resigned as the auditor of Adani group’s port company. The decision came after Deloitte expressed a desire for a wider scope of audit responsibilities covering other firms within the conglomerate. This request followed the release of a report by a US short seller, Hindenburg Research, which raised concerns about certain transactions. The resignation marks the end of Deloitte’s tenure as the auditor of Adani Ports & Special Economic Zone (APSEZ) since 2017, with the appointment of M S K A & Associates as the new auditor.
According to a statement by APSEZ, Deloitte’s resignation was linked to their request for an expanded audit role across all the listed Adani portfolio companies, which was not within the purview of APSEZ and its Board. The company emphasized that other listed Adani portfolio companies are independently administered, with separate boards, executive teams, and minority shareholders.
Deloitte had previously raised concerns about certain transactions in its audit report on APSEZ’s accounts. However, the firm was unable to verify the company’s claims due to the lack of an independent external examination. Deloitte’s call for a conglomerate-wide audit was denied by the Adani group, which cited ongoing investigations by the Securities and Exchange Board of India (SEBI) as the reason for not pursuing an independent examination of the allegations.
In its report, Hindenburg Research accused the Adani group of fraud, stock manipulation, and money laundering, while also criticizing the company for inadequate disclosures of related party transactions. The Adani group has vehemently denied all allegations.
The flagged transactions identified by Deloitte included engineering, procurement, and construction (PEC) purchase contracts with a subsidiary of a party mentioned in the Hindenburg report. Additionally, the group revised the terms of sale for its container terminal under construction in Myanmar, resulting in a revised sale consideration and an impairment charge. The Adani group claimed that these transactions involved unrelated parties.
In response to Deloitte’s resignation, APSEZ confirmed that all relevant information had been provided to the auditors and assured stakeholders that the “other matters” mentioned in the resignation letter were adequately addressed in the company’s financial statements for the fiscal year 2022-23. APSEZ expressed confidence that these matters would be appropriately resolved in the upcoming filing in September’23.
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Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
