India’s Adani Ports says Deloitte’s auditor’s resignation arguments are not convincing

A Deloitte corporate logo is seen in their office in Gurugram, India, June 13, 2023. REUTERS/Anushree Fadnavis/File Photo

NEW DELHI (Reuters) – India’s Adani Ports said on Saturday that Deloitte’s reason for resigning as the company’s auditor was “not convincing or sufficient to justify such a move” and that the global firm had all the necessary information it required to conduct the audit. practical.

A source told Reuters on Friday that Deloitte had decided to step down amid concerns about related-party deals reported in a report by US short-seller Hindenburg in January, but that the Indian firm did not want to consider them independently.

The resignation of the auditor has brought a new scrutiny of the Adani Group’s financial management, led by Indian billionaire Gautam Adani. The group denied Hindenburg’s allegations of alleged improper use of tax havens and other business dealings.

Commenting for the first time on this matter, Adani Ports said in a statement that in meetings with its leadership, Deloitte indicated concern about the lack of a broader audit role as auditors for other listed Adani companies.

The company said, however, that the auditor had been advised that it was not within the business of Adani Ports to recommend such appointments because the other entities were “completely independent”.

“The audit committee (of Adani Ports) found that the grounds put forward by Deloitte for resigning as statutory auditor were not convincing or sufficient to justify such a move,” said Gopal Krishna Pillai, Chairman of the Audit Committee at Adani Ports. in the statement.

“Deloitte was not willing to continue as auditor and, therefore, it was agreed to amicably terminate the contractual relationship between the client and the auditor,” he said.

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Deloitte did not immediately respond to a request for comment. In her resignation letter, contained in the stock exchange’s disclosure of Adani’s company on Saturday, she said she was resigning “with immediate effect” because she was not the legal auditor for a large number of other Adani group companies.

“The company did not consider it necessary to conduct an independent, external examination” of some of the allegations in the Hindenburg report, Deloitte wrote in the letter.

Deloitte first indicated in May some transactions that had been flagged by the Hindenburg and provided only a Eligible Opinion regarding Ports of Adani, stating her concerns.

Adani Ports has appointed MSKA & Associates, an independent member firm of BDO International, as its new auditor, the company said in the statement.

After the Hindenburg Report, shares of the Adani Group lost about $150 billion in market value, but have since recovered about $50 billion after paying down debt and gaining the confidence of investors such as Australian-listed investment firm GQG Partners.

This month, Adani’s Ambuja Cement (ABUJ.NS) said it would buy a majority stake in smaller rival Sanghi Industries for $295 million, its first major purchase since the Hindenburg unrest.

(Reporting by Aditya Kalra in New Delhi; Editing by Russell)

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Aditya Kalra is the corporate news editor for Reuters in India, overseeing business coverage and reporting stories on some of the world’s largest companies. He joined Reuters in 2008 and in recent years has written stories on challenges and strategies for a wide range of companies – from Amazon, Google and Walmart to Xiaomi, Starbucks and Reliance. He also works extensively on investigative and deeply covered business stories.

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Munsif Vengatil is Reuters’ India technology correspondent, based in New Delhi. It tracks how policymaking affects India’s technology business, and how the country is now competing more aggressively to be a force in the global electronics supply chain. He also regularly reports on the big tech giants, including Facebook and Google, and their strategies and challenges in the key Indian market.

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