Adani Ports and Special Economic Zone Ltd’s auditor said insufficient disclosures on some transactions meant it could only issue a qualified opinion on the company’s accounts, returning the spotlight to allegations made by short seller Hindenburg Research . Gautam AdaniEmpire of
Deloitte Haskins & Sells LLP on Tuesday raised concerns over the port unit’s transactions with three entities, which the company said were unrelated parties. But the auditor said it could not confirm that the parties were in fact unrelated, and that the firm had refused to commission an independent external examination that would help prove so.
Noting that “the Group’s assessment did not constitute sufficient appropriate audit evidence for audit purposes,” Deloitte said it therefore could not comment on whether the company was fully compliant with local laws.
It is the first time that a top auditor has issued a qualified opinion on part of the empire’s books, citing allegations from the American Short Seller Report that wiped more than $100 billion off the conglomerate’s market value. The move will reignite concerns that information gaps remain in the port-to-power conglomerate’s financial dealings, and hinder Hindenburg’s own efforts to repel allegations of widespread corporate fraud.
Adani Group Hindenburg denied the allegations. It is awaiting the findings of an investigation by India’s markets regulator, which needs to conclude by the August 14 deadline, on any possible violations by the group. An expert panel appointed by India’s top court this month found no regulatory failure or signs of price manipulation in Adani Group shares in its interim report.
Here are the three transactions flagged by Deloitte:
* The Adani group signed an engineering contract with a subsidiary of a company identified in the Hindenburg report, from which 37.5 billion rupees ($453 million) could be recovered by March 31. The auditor was told by the group that this contractor is not a related party.
*Financial transactions involving equity have been entered into with parties identified in the Short Seller Report. The Adani Group told Deloitte that it was not a related party. All the payments were settled without any outstanding balance.
* The sale of its Myanmar port by Adani Ports to Anguilla-incorporated Solar Energy Limited was done earlier this month. The sale price was revised from Rs 20.15 billion to just Rs 2.47 billion and an impairment charge was made. The group informed the auditor that it is not a related party.
Deloitte Haskins & Sells LLP on Tuesday raised concerns over the port unit’s transactions with three entities, which the company said were unrelated parties. But the auditor said it could not confirm that the parties were in fact unrelated, and that the firm had refused to commission an independent external examination that would help prove so.
Noting that “the Group’s assessment did not constitute sufficient appropriate audit evidence for audit purposes,” Deloitte said it therefore could not comment on whether the company was fully compliant with local laws.
It is the first time that a top auditor has issued a qualified opinion on part of the empire’s books, citing allegations from the American Short Seller Report that wiped more than $100 billion off the conglomerate’s market value. The move will reignite concerns that information gaps remain in the port-to-power conglomerate’s financial dealings, and hinder Hindenburg’s own efforts to repel allegations of widespread corporate fraud.
Adani Group Hindenburg denied the allegations. It is awaiting the findings of an investigation by India’s markets regulator, which needs to conclude by the August 14 deadline, on any possible violations by the group. An expert panel appointed by India’s top court this month found no regulatory failure or signs of price manipulation in Adani Group shares in its interim report.
Here are the three transactions flagged by Deloitte:
* The Adani group signed an engineering contract with a subsidiary of a company identified in the Hindenburg report, from which 37.5 billion rupees ($453 million) could be recovered by March 31. The auditor was told by the group that this contractor is not a related party.
*Financial transactions involving equity have been entered into with parties identified in the Short Seller Report. The Adani Group told Deloitte that it was not a related party. All the payments were settled without any outstanding balance.
* The sale of its Myanmar port by Adani Ports to Anguilla-incorporated Solar Energy Limited was done earlier this month. The sale price was revised from Rs 20.15 billion to just Rs 2.47 billion and an impairment charge was made. The group informed the auditor that it is not a related party.