Auditor flags three Adani Ports transactions over lack of disclosure
NEW DELHI: Deloitte Haskins & Sells LLP, the auditor of Adani Ports & Special Economic Zone (APSEZ), country’s largest private port operator, has raised red flags on the three transactions of the company and issued a qualified opinion on the company’s accounts over lack of disclosure.
The auditor stated that as per data provided to them, they could not confirm whether the parties involved in the transactions were indeed unrelated as no independent external examination has been done to prove the same.
This is one of the first times when a leading audit firm has raised flags on the financial dealings of an Adani Group firm. The dealings of the port-to-power conglomerate were recently questioned by US-based short-seller Hindenburg Research.
“The (Adani) group didn’t consider it necessary to have an independent external examination of these allegations (by Hindenburg) because of their evaluation and the ongoing investigation by the Sebi as directed by the Supreme Court. The evaluation performed by the group does not constitute sufficient appropriate audit evidence for the purpose of our audit,” noted Deloitte in the auditors’ report on the audit of Q4FY23 and FY23. Among the three transactions, one involves Adani Ports selling Myanmar Port to a relatively unknown firm named Solar Energy ltd, incorporated in tax haven Anguilla.
“The audit committee of the company as well as the company is of the view that an independent examination at this stage will not be appropriate given ongoing probe by Sebi and the expert panel appointed by the Supreme Court. Deloitte’s qualification this year, as we summarise it, is owing to pending conclusion of these investigations,” said Adani Spokesperson.
Adani Ports earlier this month had announced selling its Myanmar port to Solar Energy Ltd. The sale price was revised from `2,015 crore to just Rs 247 crore and an impairment charge was taken. The other transaction in question includes Adani Group signing an engineering contract with a subsidiary of a company identified in the Hindenburg report from whom Rs 3,750 crore was recoverable as of March 31, 2023. Deloitte has said there have been financial transactions, including of equity, made with parties identified in the Hindenburg report. Adani Group told Deloitte these are not related parties.
Auditor picks some loopholes
Auditor stated that as per data provided to them, they could not confirm whether the parties involved in the transactions were unrelated as no independent external examination has been done to prove the same
Adani Group cites Sebi probe as reason
Adani Port in a statement said the audit committee of the company as well as the company is of the view that an independent examination at this stage will not be appropriate given the ongoing investigations by Sebi