Deloitte Haskins & Sells LLP will be resigning as the auditor of Adani Ports and Special Economic Zone Ltd. in the next few days due to the differences with the company management over the auditor’s position on certain transactions. This audit firm was reappointed as the statutory auditor just last year for a five-year period, now before even completing the tenure Deloitte decided to resign from billionaire Gautam Adani’s ports business.
Deloitte leaving Adani ports would be the third change in the position of auditor for Adani Group companies over the past few months. This news of resignation comes just days after the Supreme Court asked SEBI to submit its investigation report on Adani Group’s market transactions that involved 13 suspicious foreign portfolio investors by 14 August.
In May, Deloitte had flagged three transactions including recoveries from a contractor identified in the Hindenburg report, as it issued a qualified opinion on the accounts of Adani ports and the Special economic zone. In the auditors’ report on the audit of the fourth quarter and 2022-23 financials, Deloitte highlighted transactions with three entities that the company said were unrelated parties.
On this Deloitte explained that it could not attest to the company’s statement as “ The Adani group did not consider it necessary to have an independent external examination of these allegations (made by Hindenburg) because of their evaluation and ongoing investigation by SEBI.” Based on certain observations, the auditor said that it is unable to comment on whether the transactions may result in possible adjustments in the statement in respect of related parties and whether the company should have complied with applicable laws and regulations.
In the last few months, the list of issues keeps on increasing between the audit firm and the company which led to the decision of resignation. Although resigning from audit engagements is a complex process and therefore it may take time. As per the report of the Economic times, the auditor is likely to resign and a formal announcement is expected within the next 3-4 days.
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