September 25, 2023

Adani Ports Disputes Resignation of Deloitte Auditor, Asserts Inadequate Convincing Arguments

Deloitte Resigns as Auditor of Indian Adani Ports Amid Controversy

Deloitte, one of the world’s largest professional services firms, has resigned from its position as auditor of India’s Adani Ports. The move comes after concerns were raised regarding certain related party transactions, as highlighted in a report by U.S. short seller Hindenburg.

Adani Ports, however, has dismissed Deloitte’s reasons for resigning, stating that they were “not convincing or sufficient.” The company maintains that it provided all the necessary information for the audit to be conducted effectively. The resignation has drawn increased attention to the financial management of Adani Group, led by Indian billionaire Gautam Adani.

Hindenburg had alleged that Adani Group had engaged in improper use of tax havens and misconduct. Adani, on the other hand, has vehemently denied these allegations. The controversy surrounding the resignation has further intensified the scrutiny faced by the conglomerate.

While Adani Ports acknowledged that Deloitte had expressed concerns over the lack of a wider audit role as auditors of other listed Adani companies, the company stated that it was not its responsibility to recommend such appointments. The Audit Committee of Adani Ports disagreed with Deloitte’s reasons for resignation and decided to terminate the client-auditor relationship amicably.

Deloitte has yet to respond to requests for comment on the matter, leaving its stance unclear. Meanwhile, MSKA & Associates, an independent member firm of BDO International, has been named as the new auditor for Adani Ports.

The Hindenburg report took a toll on the Adani group stocks, leading to a significant loss of $150 billion in market value. However, since then, the stocks have managed to recover around $50 billion. Adani’s Ambuja Cements recently made a major purchase, acquiring a majority stake in Sanghi Industries for up to $295 million, amidst the turmoil caused by the Hindenburg report.

The resignation of Deloitte and the subsequent appointment of a new auditor have added to the ongoing controversy surrounding Adani Group. With the company facing allegations and heightened scrutiny, its future actions and responses will play a crucial role in restoring trust among investors and stakeholders.