The Deloitte company which is one of the largest auditing firms has decided to resign as auditor of India’s Adani Ports , Adani Ports and Special Economic Zone Ltd(APSE.NS) over concerns about certain transactions flagged in a report by Hindenburg, which the company did not wish to independently look into.
Deloitte had pointed to certain transactions flagged by the U.S. short-seller in its report and gave only a qualified opinion, which indicates concerns by a company’s auditor.
The auditor’s move casts a fresh shadow on financial management at Adani Group, which has since faced the brunt of Hindenburg’s allegations around alleged improper use of tax havens, convoluted related party transactions and the group’s debt levels, which the group has denied.
Its group stocks lost about $150 billion in market value since the report, but have since regained some lost ground after it paid its debt and gained investor confidence.
Deloitte’s resignation comes after concerns raised by Deloitte about certain transactions between Adani Ports and three entities. Deloitte couldn’t verify Adani’s claims and expressed uncertainty about the company’s compliance with local laws.
BDO India LLP’s audit arm, MSKA & Associates, might take over the auditing responsibility from Deloitte.
Last month, Adani Chairman Gautam Adani called Hindenburg’s report a “malicious attempt” at damaging the conglomerate’s reputation and said the group was confident of its governance and disclosure standards after the panel found no lapses.
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