Adani again in spotlight as Ports unit names new auditors after Deloitte quits

Gautam Adani’s ports business appointed MSKA & Associates as its statutory auditors after Deloitte Haskins & Sells LLP resigned, a move that may again put the spotlight on governance at the Indian conglomerate.

The appointment at Adani Ports & Special Economic Zone Ltd. is effective from August 12 until the date of its next annual general meeting to be held in 2024, the company said in a filing Son atur-day. MSKA is a member of international accounting network BDO.

For the latest headlines, follow our Google News channel online or via the app.
The Indian unit of Deloitte raised concerns in May over transactions between Adani Ports and three entities that Adani said were unrelated parties. Deloitte said at the time it couldn’t verify Adani’s claims or determine if the business was fully compliant with local laws. Bloomberg News reported Friday that Deloitte planned to resign.

The resignation brings back into focus governance of Adani’s empire just before the Securities and Exchange Board of India is due to submit the results of a probe into short seller Hindenburg’s wide-ranging allegations of accounting fraud and market manipulation.

Adani has repeatedly denied any wrongdoing and a panel appointed by India’s Supreme Court found no regulatory failure or signs of stock price manipulation.

Deloitte Haskins & Sells said in a letter it’s tendering its resigna-tion because “we are not statutory auditors of a substantial number of other Adani Group of companies. Because Deloitte couldn’t look into the accounts of several other group companies and its transactions with each other, suppliers or customers, it had to qualify its audit of the company, as per its auditor notes dated May 30.”

The reasons for Deloitte’s resignation “were not convincing or sufficient to warrant such a move,” G.K. Pillai, the chairman of Adani Ports audit committee, said in the statement.

Since the boards of other group companies are independent enti-ties, it wasn’t within Adani Ports and its board’s remit to recommended group-wide appointments, Pillai said.

It’s not the first time an auditor has expressed reservations about Adani’s companies. S.R. Batliboi, a member firm of Ernst & Young, has also repeatedly issued qualified opinions on the fi-nancials of Adani Power Ltd., while a member of global accounting giant KPMG resigned as co-auditor of Adani Green Energy in 2021 and turned down a request by the conglomerate to audit some of its other companies amid heightened scrutiny of India’s accounting industry.

The Adani Group has previously said it’s compliant with Indian laws and welcomes Sebi’s investigation. The Hindenburg broadside had at one point wiped more than $150 billion of market value from Adani’s listed companies. The group has in recent months disclosed fresh fundraising plans, raised billions from GQG Partners and Qatar Investment Authority and sought refinancing with international banks as it seeks to recover from the shortseller

The market regulator is expected to file a report on its investigation into Adani Group’s accounting and corporate governance on Monday.

Read more:

QIA said to invest $500 mln in Adani Green: Report
Adani expands Indian cement empire with 56.74 pct Sanghi buy-out deal at $605 mln
Indian tycoon Adani aims to transform famous Mumbai slum Dharavi into glitzy hub