Deloitte to quit as Adani Ports’ auditor over concerns flagged by Hindenburg -source

By Aditya Kalra

NEW DELHI (Reuters) -Deloitte has decided to resign as 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, a source with direct knowledge said.

Deloitte in May had pointed to certain transactions flagged by the U.S. short-seller in its report and gave only a qualified opinion, which indicates concerns by a company’s auditor.

The auditor’s move casts a fresh shadow on financial management at Adani Group, which has since January faced the brunt of Hindenburg’s allegations around alleged improper use of tax havens, convoluted related party transactions and the group’s debt levels, which the group has denied.

Its group stocks lost about $150 billion in market value since the report, but have since regained some lost ground after it paid its debt and gained investor confidence.

Deloitte’s resignation comes after it asked Adani Ports to conduct an independent inquiry on related party transactions flagged by Hindenburg, to which the company did not agree, the source said.

Deloitte and Adani Ports did not immediately respond to Reuters’ requests for comments.

Deloitte’s decision to quit as Adani Ports’ auditor might come as soon as Monday, the source added.

In May, a court-appointed panel said India’s markets watchdog has “drawn a blank” in investigations into the allegations against Adani group and its pursuit of the case could be a “journey without a destination.”

Last month, Adani Chairman Gautam Adani called Hindenburg’s report a “malicious attempt” at damaging the conglomerate’s reputation and said the group was confident of its governance and disclosure standards after the panel found no lapses.

Bloomberg News first reported Deloitte’s plans on Friday.

(Reporting by Aditya Kalra in New Delhi; writing by Sethuraman NR in Bengaluru; Editing by Varun H K)