Deloitte, Haskins & Sells LLP has quit as statutory auditors of Adani Ports and Special Economic Zone (APSEZ). This recent development rekindles the discourse ‘all is not well with Adani’ besides rubbing salt in the wounds given by the Hindenburg report.
Now that Deloitte has resigned, M S K A & Associates will be the new auditors.
The Adani group firm reappointed Deloitte as its statutory auditor for another term of five years in July 2022. Deloitte started working with APSEZ in 2017.
In May this year, the audit firm raised concern over certain transactions identified in the Hindenburg report.
As per the report by The Morning Context, citing Deloitte’s note, Adani group declined to get an independent external examination that would help outweigh the evidence for alleged financial misconduct. The Securities and Exchange Board of India (SEBI) is investigating the allegations made by Hindenburg Research against Adani Group, necessitating for independent examination.
In the August 12 resignation letter, Deloitte resigned as an auditor of APSEZ with immediate effect as they are “not statutory auditors of a substantial number of other Adani Group of companies.”
It continued, and it gave a qualified opinion in the audit of financial statements for the first two quarters of the 2023 calendar year.
APSEZ rebutted Deloitte’s reasoning and said Deloitte was not given a “wider audit role” covering other listed Adani portfolio companies that culminated in their termination of relation.
“The Audit Committee was of the view that the grounds advanced by Deloitte for resignation as Statutory Auditor were not convincing or sufficient to warrant such a move,” Adani Ports said in a statement quoting Gopal Krishna Pillai, Chairman of the Audit Committee.
“It was also conveyed that it is not within the remit of the APSEZ and its board to recommend group-wide appointments as other listed Adani portfolio companies are completely independent, with separate boards, executive teams, and minority shareholders.”
The resignation letter from Deloitte, which was attached to the regulatory filing, said: “We are tendering our resignation …with immediate effect because we are not statutory auditors of a substantial number of other Adani group companies…including an Adani group company (and its subsidiaries) after we completed our term of five years.”
It is not discernible which Adani group company Deloitte was referring to.