Shares of all Adani Group companies were flashing in red on Monday, with the flagship Adani Enterprises topping the chart by falling over 5% in intraday trade on the BSE. Billionaire Gautam Adani-led Adani Group has lost nearly ₹26,000 crore in market capitalisation today as the news of Deloitte’s resignation as auditor of Adani Ports has triggered a sell-off in the stocks. Investors also turned jittery as the deadline for the SEBI's probe into the Adani-Hindenburg matter ends today and the market regulator is expected to submit the results of a probe before the Supreme Court during the day.
Early today, all ten listed companies of port-to-power conglomerate opened lower after the Adani Ports and Special Economic Zone (APSEZ) announced that Deloitte Haskins & Sells LLP has resigned as auditor of the company. Deloitte has been replaced by MSKA & Associates, an independent member firm of BDO International, as the statutory auditors of the company, subject to the shareholders’ approval.
Reacting to the news, APSEZ shares declined as much as 3.45%, while flagship Adani Enterprises tumbled 5.4% intraday on the BSE.
Among others, Adani Energy Solutions, Adani Power, Adani Wilmar, Adani Green, NDTV, and Adani Total Gas were down in the range of 1% to 4%.
In a similar trend, newly acquired cement entities ACC and Ambuja Cements shed up to 4% during the trade so far.
Meanwhile, the BSE Sensex was down 185 points, or 0.28%, at 65,137 levels at the time of reporting. In the early trade, the Sensex dropped as much as 500 points, or 0.76%, to 64,822 marks.
As per report, SEBI is expected to submit its final report regarding the allegations made by U.S.-based Hindenburg Research against the Adani Group to the Supreme Court today. The apex court had set a deadline of August 14 for SEBI to conclude the probe and submit its report, with the next hearing scheduled for August 29.
On January 24, 2023, short-seller Hindenburg Research accused the Gautam Adani-led conglomerate of “pulling the largest con in corporate history”. The conglomerate, however, called the allegations “malicious”, “baseless” and a “calculated attack on India”. Following this, the SC directed the SEBI to probe the matter with regard to violations of securities (regulation) rules, related party rules, and stock manipulation.
Recently, Deloitte, the statutory auditors of Adani Ports, raised concerns over transactions between Adani Ports and three entities that Adani said were unrelated parties.
On August 12, Adani Ports informed the exchanges that Deloitte Haskins & Sells LLP had tendered their resignation from the position of statutory auditors of the company and its material subsidiaries.
Adani Ports appointed Deloitte as statutory auditor in May 2017, which was extended further by another term of five years in July 2022. In Deloitte’s recent meeting with APSEZ management and its Audit Committee, which, by policy, is comprised of and chaired by independent directors only (G. K. Pillai, G. Raghuram, P. S. Jayakumar and Nirupama Rao), Deloitte indicated a lack of a wider audit role as auditors of other listed Adani portfolio companies, Adani Ports said in the Exchange filing.
The release further said, “The audit committee 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 was also conveyed that it is not within the remit of the APSEZ and its board to recommend group-wide appointments as other listed Adani portfolio companies are completely independent, with separate boards, executive teams and minority shareholders. Following this, Deloitte was not willing to continue as APSEZ’s statutory auditor and, therefore, it was agreed to amicably end the client-auditor contractual relationship between APSEZ and Deloitte.”
G. K. Pillai, Chairman of Audit Committee of Adani Ports, said, “It is important to mention that, in response to a query by the Audit Committee, Deloitte confirmed that they have received all the APSEZ information from the management of the Company. The same has been confirmed by Deloitte in their resignation letter dated August 12, 2023 to the Company.”
“The ’Other Matters’ highlighted in the auditor’s resignation are adequately disclosed and addressed in our FY23 financial statements. We are fully confident that these matters will be appropriately resolved in our September ‘23 filing,” he added.
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