Adani Ports Auditor Deloitte to Resign After Flagging Concerns

The auditor of billionaire Gautam Adani’s ports business is planning to resign, people familiar with the matter said, a move that may heighten concerns about accounting quality at the Indian conglomerate targeted by short seller Hindenburg Research.

(Bloomberg) — The auditor of billionaire Gautam Adani’s ports business is planning to resign, people familiar with the matter said, a move that may heighten concerns about accounting quality at the Indian conglomerate targeted by short seller Hindenburg Research.

Deloitte Haskins & Sells LLP has communicated to Adani Ports & Special Economic Zone Ltd. its resignation plans and a formal announcement is expected in coming days, one of the people said, asking not to be identified discussing a sensitive matter.

The Indian unit of the global accounting giant in May raised concerns over transactions between Adani Ports and three entities that Adani said were unrelated parties. The auditor said at the time it couldn’t verify Adani’s claims and couldn’t determine if the business was fully compliant with local laws. 

The planned resignation puts a fresh spotlight on governance of Adani’s empire just days before the Securities and Exchange Board of India is due to submit the results of a probe into Hindenburg’s wide-ranging allegations of accounting fraud and market manipulation. Adani has repeatedly denied any wrongdoing and a panel appointed by India’s Supreme Court found no regulatory failure or signs of stock price manipulation.

BDO India LLP’s audit arm MSKA & Associates may replace Deloitte Haskins & Sells, one of the people said. 

An email and calls to the Adani group were unanswered. Representatives for Deloitte Haskins & Sells and BDO declined to comment.

Read more: Hindenburg’s Adani Strike Adds Pressure on Already Wary Auditors

It’s not the first time an auditor has expressed reservations about Adani’s companies. S.R. Batliboi, a member firm of Ernst & Young, has also repeatedly issued qualified opinions on the financials of Adani Power Ltd., while a member of global accounting giant KPMG resigned as co-auditor of Adani Green Energy in 2021 and turned down a request by the conglomerate to audit some of its other companies amid heightened scrutiny of India’s accounting industry, Bloomberg News has previously reported.

The Adani Group has previously said it’s compliant with Indian laws and welcomes Sebi’s investigation. The Hindenburg broadside had at one point wiped more than $150 billion of market value from Adani’s listed companies. The group has in recent months disclosed fresh fundraising plans, raised billions from GQG Partners and Qatar Investment Authority and sought refinancing with international banks as it seeks to recover from the shortseller attack and return to business as usual.

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