A source told Reuters on Friday Deloitte decided to resign from the role amid concerns over certain transactions flagged in a report by Hindenburg, which the company did not wish to look into independently.
The auditor’s resignation has brought fresh scrutiny of the financial management at Adani Group. The group has denied Hindenburg’s allegations made in January around alleged improper use of tax havens, convoluted related party transactions and the group’s debt levels.
In recent meetings with Adani Ports leadership, Deloitte indicated a lack of a wider audit role as auditors of other listed Adani portfolio companies, but the Indian company conveyed it is not within its remit to recommend group-wide appointments as other portfolio companies “are completely independent, with separate boards.”
“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.
The company on Saturday named MSKA & Associates, an independent member firm of BDO International, as its new auditor.
Deloitte in May had pointed to certain transactions flagged by the U.S. short-seller Hindenburg in its report and gave only a qualified opinion, which indicates concerns by a company’s auditor.