Deloitte announced yesterday that it has decided to resign as the auditor of India’s Adani Ports amid concerns over certain transactions flagged in a report by Hindenburg, which the company did not wish to independently look into. The famous Hindenburg report, released in January 2023, made a series of allegations against the Adani Group, including various financial irregularities like improper accounting practices, stock market manipulation, and fraudulent transactions.
Deloitte’s decision to resign as the auditor of Adani Ports, an Indian conglomerate, stems from concerns raised regarding specific transactions flagged in a report by Hindenburg, a U.S. short-seller. This move has significant implications and once again casts a shadow on the Adani Group’s financials.
Deloitte had highlighted certain transactions in May 2023, as also flagged by Hindenburg’s report, and indicated its concerns as an auditor with a qualified report. This once again stirred the waters for Adani, which had since partially calmed for the conglomerate as the Adani Group refuted the claims made by Hindenburg.
The pivotal point in Deloitte’s resignation was its request for Adani Ports to conduct an independent inquiry into the flagged related party transactions, a proposal the company declined to pursue. Deloitte’s subsequent decision to resign underscores potential discrepancies in corporate governance practices and commitment to transparency within Adani Group.
As a consequence of the report and Deloitte’s concerns, Adani Group’s stock value plummeted by approximately USD 150 billion. However, subsequent actions, such as debt repayment and enhanced investor confidence, led to a partial recovery of the lost market value.