Adani Ports Auditor Resigns, Raising Doubts Anew

Deloitte’s resignation as the auditor of Gautam Adani’s logistics unit, one of India’s largest commercial ports operators and a key revenue source for Adani, has dealt a fresh blow to the tycoon’s business empire. This development comes as Adani strives to rebuild investor trust following a damaging assault by short-seller Hindenburg Research.

Over the weekend, Deloitte cited concerns regarding its ability to thoroughly scrutinize transactions between companies within the Adani Group and the logistics unit as the reason for its resignation. The move highlights the complex nature of related party transactions, which were central to a scathing report by Hindenburg Research earlier this year. The report accused Adani of employing offshore entities to manipulate earnings, sidestep potential write-downs, and artificially enhance net income. Adani has vehemently denied these allegations.

Deloitte had served as auditor for Adani Ports and Special Economic Zone (APSEZ) since 2017. However, in May, Deloitte raised concerns about transactions involving “related parties” and Adani’s refusal to subject the short-seller’s claims to an independent external review. Deloitte’s qualified opinion of the group’s results expressed that a memo from an external law firm, prepared for Adani, did not constitute sufficient appropriate audit evidence.

Adani responded by stating that it deemed an external evaluation unnecessary while the Securities and Exchange Board of India (SEBI), the nation’s securities regulator, was conducting its investigation into the allegations put forth by the short-seller. SEBI’s findings are expected to be presented to India’s Supreme Court shortly.

Gopal Krishna Pillai, Chair of Apsez’s audit committee and a former special secretary in India’s commerce ministry, disagreed with Deloitte’s stance, asserting that the reasons for Deloitte’s resignation were insufficient. Pillai indicated that the issues highlighted by Deloitte were adequately disclosed and addressed by Adani.

In response to the situation, APSEZ has enlisted the services of MSKA & Associates, a member of the international accountancy group BDO, as its new auditor.

This marks the second high-profile audit resignation by Deloitte in India within the last three months. In June, Deloitte stepped down as the auditor for Byju’s, an education technology company, citing a failure to provide necessary financial documents.

While Adani’s listed companies have seen a partial recovery from the market losses following Hindenburg’s report, aided by investments from GQG Partners, they continue to trade below their pre-January levels.


Information for this briefing was found via Financial Times and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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