Adani Ports Auditor: MSKA And Associates To Take Over As Deloitte Resigns (Image: adaniports.com)

Deloitte Haskins and Sells has decided to tender its resignation as the auditor of LLP Adani Ports and Special Economic Zone Ltd (APSEZ). Deloitte is said to have had concerns about certain transactions highlighted about firms in the conglomerate in the report of Hindenburg Research. The resignation has been given weeks after the report. The APSEZ management and its audit committee was of the view that the decision of Deloitte was not convincing enough to warrant a resignation though they have accepted Deloitte’s resignation.

BDO India and LLP’s audit unit, MSKA and Associates is to replace Deloitte as APSEZ’s auditor.

Deloitte has been APSEZ’s auditor since 2017 and in July 2022, another term of five years was renewed. In May this year, when Deloitte highlighted three transactions, including what was identified in the Hindenburg report, APSEZ said they were un parties. On this Deloitte has said that it could not verify this claim and was unsure if the business was compliant with laws of the land. PTI has reported Deloitte saying that it could not attest to the company’s statements as an independent external examination has not been undertaken. Deloitte wanted a wider audit, which was refused by the group.

Deloitte has said about the situation that “the evaluation performed by the Group does not constitute sufficient appropriate audit evidence for the purposes of our audit,”. APSEZ has not disclosed the contents, but said “the “other matters” highlighted in the auditor”s resignation are adequately disclosed and addressed in our FY23 financial statements. We are fully confident that these matters will be appropriately resolved in our September”23 filing.”

This is not the only time that auditors of Adani companies have expressed their reservations. Bloomberg news has reported this earlier. One instance was in 2021, a member of KPMG, a global auditing company resigned as co-auditor of Adani Green Energy and another, a member of Ernst and Young, has expressed strong opinions on Adani power’s financial operations.

This recent development could bring in serious concerns about the accounting quality of APSEZ. The company seems to be courting trouble and respite at the same time. This comes at a time when SEBI (Securities and Exchange Board of India) is due to give its report on Hindenburg allegations of fraud, market manipulation and money laundering by the Adani group. The Hindenburg report also pointed at Adani group on inadequate disclosures of party transactions. Throughout, Adani group has denied any wrong doing and the Supreme Court appointed panel did not find anything amiss in regulatory mechanism or price manipulation of stocks.

(Sources: Hindustan Times, Bloomberg, PTI, CNBC, Telegraph India, Mint)