NEW DELHI: The National Financial Reporting Authority (NFRA), the accounting regulator, has launched an inquiry against one of the EY member firms, SR Batliboi, which is the statutory auditor of five listed Adani Group’s companies.
So far, it is unclear if NFRA is investigating other auditors of the Adani Group. The duration of the audit completion is also unknown at this time, as per sources. The inquiry against the EY member firm, which serves as the statutory auditor for several Adani firms, shows concerns regarding the accounting and disclosures by the Adani Group.
The Group is also subject to a court-mandated probe by market regulator securities exchange board of India(SEBI). This newspaper couldn’t elicit any comment from EY or NFRA regarding the investigation. SR Batliboi, the auditor in question, has been involved in Adani Ports & Special Economic Zone, Adani Power,Adani Green Energy, Adani Wilmar and two cement makers it acquired from Holcim Ltd.
Foreign accounting firms like EY operate in India through independent affiliates due to legal restrictions. Hindenburg’s report in January raised doubts about Adani’s accounting and audits, leading to a decline in its market value. The Group responded, asserting that their audits are conducted by certified professionals.
Adani group in a statement said: “We reject any suggestion that Adani Group and its businesses have not acted as per the regulations and accounting standards of the jurisdictions in which we operate. Adani Group has always conducted its business in compliance with all applicable laws and regulations and is confident about its practices, governance and disclosures.”