Adani Ports auditor raises concerns over financial transparency

On Monday, Deloitte Haskins Sells LLP, Adani Ports and Special Economic Zone's auditor, raised fresh concerns about the company's insufficient disclosures regarding the company's transactions. The report raised concerns about APSEZ's transactions with three companies that the company had said were unrelated parties. However, the auditor said it could not confirm if the parties were actually unrelated. APSEZ has now issued a statement saying an investigation now would not be appropriate.

The Audit Committee of the Company and the Company are of the opinion that an independent examination at this stage will not be appropriate given the ongoing investigations by SEBI and the Expert Committee appointed by the Hon ble Supreme Court. As we summarize it, Deloitte's qualification this year is owing to the pending completion of these investigations, a company spokeswoman said.

Deloitte said it could not confirm that the parties were unrelated and that the firm refused to get an independent external examination that would help in proving the case. It signed off the company's books with what it called a qualified opinion. '' This is the first time a top-auditor has issued a qualified opinion on part of the conglomerate's books, citing the Hindenburg report that accused the company of financial misdeeds.

The three transactions were flagged by Deloitte as follows:

Adani Group s engineering contract with a subsidiary of a company, which was identified in the report, from which $453 million was recovered as of March 31. The company told the auditor that the contractor was not a related party.

Hindenburg had identified parties with whom Adani had financial transactions and all payables were said to be settled with no dues remaining.

Adani Port's sale of its Myanmar port to Solar Energy was revised to just 30 million from around $242 million and an impairment charge was taken. The auditor was told that these were not related parties either.

Shares of Adani Ports rose to 730, compared to its previous close of 737.25 on Wednesday. Adani Ports shares turned multibagger from its 52-week lows of 394.95 as the stock hit Rs 790 in the previous week, before a downturn.