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

NEW DELHI: India’s Adani Ports on Saturday said Deloitte’s reasoning to quit as auditor of the company was “not convincing or sufficient to warrant such a move” and the global firm had all the necessary information it required to conduct the process.

Deloitte had decided to resign from the role amid concerns over certain related party transactions flagged in a report by US short seller Hindenburg in January, but the Indian company did not wish to look into them independently, a source told Reuters on Friday.

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

Speaking for the first time on the matter, Adani Ports in a statement said in meetings with its leadership, Deloitte indicated a lack of a wider audit role as auditors of other listed Adani companies, but it was conveyed it was not within the remit of Adani Ports to recommend such appointments as other entities are “completely independent.”

“The Audit Committee (of Adani Ports) 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,” it said.

“Deloitte was not willing to continue as ... auditor and, therefore, it was agreed to amicably end the client-auditor contractual relationship.”

Deloitte did not immediately respond to a request for comment.

After the Hindenburg report, Adani group stocks lost about $150 billion in market value, but have since regained by around $50 billion after it paid debt and gained confidence of investors such as Australia-listed investment firm GQG Partners.

This month, Adani’s Ambuja Cements said it would buy a majority stake in smaller rival Sanghi Industries for up to $295 million, its first major purchase since the Hindenburg turmoil.

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

Deloitte in May first pointed to certain transactions flagged by Hindenburg in its report and gave only a qualified opinion related to Adani Ports, indicating concerns by a company’s auditor.