Adani Group Shares Bleed Again As Deloitte Resigns As Auditor After Agreeing With Hindenburg Allegations

At a time when India's market regulator SEBI is set to submit to the Supreme Court its report on the Adani-Hindenburg saga this week, Adani group shares have already begun bleeding due to a fresh blow.

All of Adani group¡¯s shares are bleeding today since morning after Deloitte resigned as the auditor of Gautam Adani¡¯s logistics unit Adani Ports and Special Economic Zone. Deloitte had been its auditor since the year 2017.

Adani Group Shares Bleed Again After Deloitte's Resignation

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Adani Ports' shares were down more than 2.5% in the morning, whereas Adani's flagship firm Adani Enterprises was down 4.1%, Adani Wilmar was down 2.2%, Adani Green Energy was down 2%, Adani Transmission was down 3.5%, Adani Total Gas was down 2% and Adani Power was down 1.8%.

This resignation by the audit giant comes about two months after Deloitte had agreed with some of Hindenburg research¡¯s claims against the Adani group.

The auditor's resignation has brought fresh scrutiny into Adani group¡¯s finances, nearly seven months after Hindenburg research¡¯s report had rattled the conglomerate, accusing it of accounting frauds, stock manipulations, and money laundering.

What Deloitte Wrote In Its Resignation Letter

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In its letter of resignation contained in Adani's stock exchange disclosure on Saturday, Deloitte said it was resigning with "immediate effect."

"The company (Adani Ports) did not consider it necessary to have an independent external examination" of certain allegations, which were contained in the Hindenburg report, Deloitte wrote in the letter, as per Reuters.

What Adani Ports Said About Deloitte¡¯s Resignation

Adani Ports has said that Deloitte's reason for quitting 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.

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

However it was conveyed to the auditor it was not within the remit of Adani Ports to recommend such appointments as other entities are "completely independent", the company said.

"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," Gopal Krishna Pillai, Chairman of the Audit Committee of Adani Ports, said in the statement.

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

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Also Read: Hindenburg Trolled For Failing To Detect SVB Crisis

Who Will Be Adani Ports¡¯ Next Auditor?

Professional services firm MSKA Associates, an affiliate of BDO International, will succeed Deloitte as statutory auditor of Adani Ports & SEZ (APSEZ), according to a statement by the company, an ET report said.

MSKA Associates will take over as the statutory auditor of Adani Ports & SEZ following Deloitte's resignation, which was prompted by differences over several transactions with APSEZ management. MSKA & Associates has been hired until the next APSEZ annual general meeting to be held in 2024.

Also Read: Meet Nathan Anderson, The Man Behind Hindenburg Report

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