Deloitte’s decision to resign as the auditor of Adani Ports, one of India’s largest port operators, has raised concerns about the company’s financial management. Adani Ports has stated that Deloitte’s reasons for resigning were “not convincing or sufficient to warrant such a move” and that the auditor had all the necessary information to conduct the audit process.
Deloitte’s resignation came after concerns were raised about certain related party transactions flagged in a report by U.S. short seller Hindenburg in January. However, Adani Ports did not wish to independently investigate these transactions, according to a source. The Adani Group, led by Indian billionaire Gautam Adani, has denied the allegations made by Hindenburg regarding the improper use of tax havens and other business dealings.
In response to Deloitte’s resignation, Adani Ports stated that the auditor had expressed concerns about a lack of a wider audit role as auditors of other listed Adani companies. However, Adani Ports clarified that it was not within its remit to recommend such appointments as the other entities are “completely independent.”
The Audit Committee of Adani Ports stated that it did not find Deloitte’s grounds for resignation convincing or sufficient. As a result, it was agreed to end the client-auditor relationship amicably. Adani Ports has appointed MSKA & Associates, an independent member firm of BDO International, as its new auditor.
After the release of the Hindenburg report, Adani group stocks experienced a significant decline in market value, losing around $150 billion. However, the stocks have since regained around $50 billion after the company paid off debt and gained the confidence of investors such as Australia-listed investment firm GQG Partners.
Adani’s Ambuja Cements recently announced its intention to acquire a majority stake in smaller rival Sanghi Industries for up to $295 million. This is the company’s first major purchase since the Hindenburg turmoil.
The resignation of Deloitte as the auditor of Adani Ports has brought fresh scrutiny to the financial management of the Adani Group. The company’s denial of the allegations made by Hindenburg and the appointment of a new auditor aim to address these concerns and restore investor confidence.
Reporting by Aditya Kalra in New Delhi, Editing by Ros Russell
What were the specific reservations expressed by the auditor regarding the lack of transparency and disclosures surrounding Adani Ports’ financial transactions?
N the company’s financial statements. The auditor had expressed reservations about the lack of transparency and disclosures surrounding these transactions.
Adani Ports has defended its financial management practices and stated that it has always adhered to applicable laws and regulations. The company has emphasized its commitment to maintaining highest standards of corporate governance and transparency.
The resignation of a reputable auditor like Deloitte has raised questions about the credibility and accuracy of Adani Ports’ financial statements. Deloitte’s decision to step down from the role signifies a breakdown in trust between the auditing firm and the company.
Investors and stakeholders have expressed concerns over the potential impact of this development on the company’s reputation and financial health. Some analysts believe that the resignation may lead to increased scrutiny from regulatory authorities and potential downgrades by credit rating agencies.
In response to Deloitte’s resignation, Adani Ports has stated that it has already appointed another auditing firm to undertake the audit process. The company has assured stakeholders that its financial statements will continue to be accurate and reliable.
However, the resignation of a long-standing auditor raises questions about the company’s ability to maintain proper financial controls and reporting standards. It may also lead to increased skepticism from investors and further scrutiny of Adani Ports’ financial practices.
It remains to be seen how Adani Ports will address these concerns and restore the confidence of investors and stakeholders. The company will need to provide clear and transparent explanations regarding the related party transactions flagged by Deloitte, as well as take steps to enhance its corporate governance practices to ensure transparency going forward.
“Interesting development. Curious to see how this dispute unfolds between Adani Ports and Deloitte.”