Deloitte’s resignation comes after it asked Adani Ports to conduct an independent inquiry on related party transactions flagged by Hindenburg but the company said the allegations had no effect on financial statements and the reasons cited for quitting were not convincing to warrant such a move.
In a 163-page filing with stock exchanges relating to Deloitte Haskins & Sells LLP’s resignation, Adani Ports said 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, the firm conveyed to the auditor that it was not within its remit to recommend such appointments as other entities are “completely independent”.
“The Audit Committee (of APSEZ) 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 Gopal Krishna Pillai, former union home secretary and chairman of the Audit Committee of APSEZ, in a statement.
“Deloitte was not willing to continue as … auditor and, therefore, it was agreed to amicably end the client-auditor contractual relationship,” he said.
In the August 12 resignation letter, Deloitte said it was resigning as auditor of APSEZ with immediate effect “because we are not statutory auditors of a substantial number of other Adani Group of companies.”Adani Ports appointed MSKA & Associates, an independent member firm of BDO International, as its statutory auditors in place of Deloitte, until the date of its next annual general meeting to be held in 2024, the company said in a filing.
Deloitte, which had been the auditor of APSEZ since 2017 and was in July 2022 given another five-year term, had in May first raised concern over certain transactions flagged in the report of Hindenburg Research.
At 10.18 am, shares of Adani Ports were trading 3.2% lower at Rs 775 on BSE. On a year-to-date basis, the stock has declined 6%, however, it has rallied nearly 40% in the last six months.
Meanwhile, other Adani Group stocks also declined on Monday. Adani Enterprises fell 5.4%, while Adani Green Energy and Adani Transmission declined over 4% each. Adani Power, Adani Wilmar, and Ambuja Cement also fell nearly 3%.
