Posted on August 16, 2023
Adani Ports share price declined over 3% on Monday after Deloitte Haskins and Sells resigned as the statutory auditor of the company, citing differences of opinion. Adani Ports shares fell as much as 3.45% to ₹772.95 apiece on the BSE.
The billionaire Gautam Adani-led Adani Group, said its port business arm Adani Ports and SEZ Ltd., has appointed M S K A & Associates (an independent member firm of BDO International), as its auditor.
Deloitte Haskins was Adani Ports’ auditor since FY2018 and was reappointed for another five-year term as the statutory auditor only last year.
Deloitte’s resignation letter as Adani Ports’ statutory auditor revealed that the US-headquartered Big 4 auditor resigned prematurely primarily due to lack of clarity on transactions with certain parties alleged in the 24 January Hindenburg Research report, and because of the ₹1.75 trillion Gautam Adani-led company’s resistance to conduct an independent external evaluation.
“In Deloitte’s recent meeting with APSEZ management and its audit committee, which, by policy, is comprised of and chaired by independent directors only (G. K. Pillai, Prof G. Raghuram, P. S. Jayakumar and Nirupama Rao), Deloitte indicated a lack of a wider audit role as auditors of other listed Adani portfolio companies,” said Adani Ports in a statement Saturday evening.
Adani Ports’ 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, said the statement.
Meanwhile, other Adani Group stocks also declined in the range of 2-5%. The Adani group stock came under pressure as the capital market regulator Securities & Exchange Board of India (SEBI) will submit its report to the Supreme Court on the allegations made by US-based Hindenburg Research against the conglomerate.
Nathan Anderson, founder of Hindenburg Research, highlighted in a tweet about Deloitte’s resignation as Adani Ports’ statutory auditor after the port operator failed to provide “appropriate audit evidence” to address issues raised in the Hindenburg report.
Replying to Anderson, Adani Group Chief Financial Officer (CFO) Jugeshinder Singh noted that Adani had 42% YoY EBITDA growth in Q1FY24.
“Scrapping bottom of the barrel. Let our Hon Supreme Court complete it process and look out for our semi annual results. Adani had 42% Growth in EBITDA in 1st quarter FY 24 compared to 1st Qtr FY 23 In the meantime here are the results of the 1st quarter of our portfolio,” Singh tweeted with a snapshot of the group’s financials.
Ambuja Cement declined 3%, while ACC was trading lower by more than 1.8%.
At 9:40 am, Adani Ports share price was trading 2.89% lower at ₹777.50 apiece on the BSE.