Deloitte has stepped down from its role as the auditor for the port company within the Adani group. This move comes as the conglomerate led by billionaire Gautam Adani reported that Deloitte's decision stemmed from a desire for a broader scope of oversight across other companies within the conglomerate, prompted by a report from a US short seller. As a result of Deloitte's resignation, the stocks of Adani group companies experienced a decline on Monday.
Following a report by a US short seller, Deloitte, the auditor of the Adani group's port company, has chosen to resign from its position. This decision was attributed to the group's founder, billionaire Gautam Adani, who noted that Deloitte sought expanded authority to oversee various other companies within the conglomerate. Consequently, on Monday, the shares of Adani group enterprises witnessed a drop in value.
In the wake of a report issued by a US short seller, Deloitte has officially resigned as the auditor for the Adani group's port company. The conglomerate, led by billionaire Gautam Adani, revealed that the resignation was driven by Deloitte's inclination to have a more extensive mandate that covers oversight of other entities within the conglomerate. This development prompted a decrease in the stock prices of Adani group businesses on the subsequent Monday.
Ambuja Cements shares experienced a notable decline of 3.49%, while Adani Enterprises saw a decrease of 3.26%. Similarly, Adani Transmission's value dropped by 2.69%, and ACC registered a slip of 2.27% on the BSE.
Adani Green Energy's stock witnessed a decrease of 2.09%, while Adani Wilmar faced a decline of 1.96%. Adani Total Gas experienced a dip of 1.88%, Adani Ports saw a slide of 1.66%, NDTV's shares went down by 1.37%, and Adani Power's stock was down by 0.78%.
Within the equity market, the 30-share BSE Sensex demonstrated a recovery towards the end of the trading session, achieving an increase of 79.27 points or 0.12%, ultimately settling at 65,401.92.
The resignation followed Deloitte's expression of concern regarding specific transactions highlighted in Hindenburg Research's report, occurring several weeks after the report's release.
In an official statement, Adani Ports & Special Economic Zone (APSEZ) has confirmed both the resignation and the subsequent appointment of M S K A & Associates as the new auditor.
Deloitte had previously served as APSEZ's auditor since 2017, and in July 2022, the firm was granted an additional five-year term.
During a recent meeting between Deloitte and APSEZ's management, as well as its Audit Committee, Deloitte expressed a desire for a broader scope in its audit role that encompassed other publicly listed companies within the Adani portfolio. The audit committee, however, held the viewpoint that the reasons provided by Deloitte for its resignation as the statutory auditor lacked sufficient justification to warrant such an action.
APSEZ clarified that it fell outside the scope of both the firm and its board to propose appointments on a group-wide level, given that other listed Adani portfolio companies function as entirely independent entities. These companies maintain separate boards, executive teams, and minority shareholders.
Consequently, Deloitte expressed its unwillingness to persist as the statutory auditor for APSEZ. Subsequently, both parties mutually agreed to terminate the client-auditor contractual arrangement between APSEZ and Deloitte in an amicable manner.
