Deloitte has resigned as the auditor of the port company of the Adani Group, which is headed by billionaire Gautam Adani, saying the auditor wanted a broader mandate than other companies in the group following the report of the company. a seller for American Discovery.
The resignation comes weeks after Deloitte raised concerns about certain transactions flagged in the Hindenburg Research report.
In a statement, Adani Ports & Special Economic Zone (APSEZ) confirmed his resignation and appointed MSKA & Associates as the new auditor.
Deloitte has been an auditor of APSEZ since 2017. In July 2022, he was assigned a new 5-year assignment. During Deloitte's recent meeting with APSEZ management and its audit committee, Deloitte pointed out that there is no broader audit role as auditors of listed portfolio companies. other listing of APSEZ. Adani. The Audit Committee considers that Deloitte's reasons for resigning as an auditor are not reasonable, convincing, or sufficient to justify such a decision," he said.
APSEZ said that proposing group-wide appointments is beyond the scope of the company and the board, as the other listed companies in Adani's portfolio are completely independent, from the board of directors. , management team, and separate minority shareholders.
“Thereafter, Deloitte did not wish to continue as an auditor of APSEZ, and as such, they agreed to amicably terminate the client-audit contractual relationship between APSEZ and Deloitte,” he said.
Deloitte Haskins & Sells LLP reported three transactions in May, including withdrawals from a contractor identified in the Hindenburg report, that provided a qualified opinion on the APSEZ account. In its audit report on the audit of financial statements for the fourth quarter and fiscal year 2022-2023, Deloitte highlighted transactions with three legal entities that the company considers unrelated parties.
However, Deloitte said it could not corroborate the company's claims because no external independent review has been performed to substantiate the claims.
He then wanted a broader audit on a corporate scale, but the Adani group company refused.
The Hindenburg Research, in its January 24 report presenting fraud, stock manipulation, and money laundering allegations against the Adani Group, also pointed to inadequate disclosure of related party transactions. Adani Group has denied all allegations. Deloitte has said that Adani Group does not consider it necessary to have an external independent review of these allegations given its review and the ongoing investigation by the Securities and Exchange Commission of India (SEBI). ).
“The assessment rendered by the Group does not constitute sufficient and appropriate audit evidence for our audit purposes,” Deloitte said in APSEZ's financial statements.
In the absence of an independent external review and SEBI pending the conclusion of the investigation, the auditor said he could not comment on whether the company was fully compliant with the law and whether transactions reported may result in adjustments and/or disclosures in the financial statements. related party statement.
