Adani Ports & Special Economic Zone Ltd’s auditor, Deloitte Haskins & Sells LLP, has expressed concerns regarding insufficient disclosures about certain transactions, leading to a qualified opinion on the company’s accounts. This development brings attention back to the allegations made by short seller Hindenburg Research against Gautam Adani’s empire, as reported by Bloomberg.
Deloitte stated that it was unable to certify the unrelated nature of the port unit’s transactions with three firms, as the company declined to obtain an independent external assessment that could provide evidence for this claim. Therefore, Deloitte could not confirm whether the company fully complied with local regulations.
This is the first time a top auditor has issued a qualified opinion on a portion of the Adani empire’s accounts, citing concerns raised by the US short seller report. Hindenburg Research’s claims have already caused a market value loss of over $100 billion for the conglomerate. The qualified opinion could reignite fears of disclosure gaps in the group’s financial dealings, hindering its efforts to move past the allegations of corporate fraud.
The Adani Group has denied Hindenburg’s charges and is awaiting the results of an investigation by India’s market regulator, expected to be completed by the August 14 deadline. An interim report by an expert panel formed by India’s highest court found no evidence of regulatory failure or price manipulation in Adani Group equities.
Deloitte flagged three transactions of concern: an engineering contract with a subsidiary of a company mentioned in the Hindenburg report, financial transactions with individuals named in the short seller report, and the sale of Adani Ports’ Myanmar port to Solar Energy Ltd. The group claims these parties are unrelated and has settled all payables.
The qualified opinion from the auditor raises questions about transaction disclosures and underscores the ongoing impact of the allegations made by Hindenburg Research on the Adani empire.