Indian Accounting Regulator Launches Inquiry on Adani Auditor EY - Report

Adani Group”s longtime auditors are under the scrutiny of the accounting regulator, as reported by Economic Times. According to the report, the National Financial Reporting Authority (NFRA) has initiated an examination of the member firms of EY in India, S.R. Batliboi.

As part of the inquiry, the regulator has requested the firms to submit files to audits of the companies governed by billionaire Gautam Adani. The regulator has specifically asked for files generated during the years 2014-2023.

However, the report does not disclose the duration of the investigations or any potential ramifications thereafter. Representatives of the NFRA and the Adani Group have not responded to inquiries bt ET regarding this matter.

Nevertheless, according to experts, the inquiry validates the serious allegations made by the American short seller Hindenburg in February of this year, which alleged accounting malpractices and share corruption. However, the Adani Group has denied these allegations as fabricated.

S.R. Batliboi, one of the longtime auditors of the Adani Group, has been responsible for auditing the books of Adani Power Ltd., Adani Green Energy Ltd., Adani Wilmar Ltd., and the two cement makers that the tycoon acquired from Holcim Ltd. last year. Additionally, Batliboi also signed off on the books of Adani Ports & Special Economic Zone Ltd., considered to be the conglomerate’s crown jewel, for a decade leading up to 2017.

Foreign accounting firms are not permitted to register as auditors in India due to Indian law. Consequently, Big Four firms such as EY operate through independently run affiliates.”