MUMBAI: Adani Ports‘s statutory auditor Deloitte has flagged concerns over certain deals the company had entered into, including one with an engineering, procurement and construction (EPC) contractor that was named in the Hindenburg report, as it could not confirm if these were non-related-party transactions.
As a result, it has issued a “qualified opinion” on the FY23 results. A qualified opinion means an audit report is not clean. In other words, an auditor has reservations about some transactions that prevents it from issuing an unqualified or clean report.
This is the first time a leading auditor has issued a qualified opinion on Adani Group‘s financial statements citing the Hindenburg report that had accused the conglomerate of financial wrongdoings. This also brings to focus the information gaps that persist in the group’s financial dealings and hampers its attempts to move past Hindenburg’s allegations.
According to Deloitte, Adani Ports told the audit firm that the three transactions identified by it were not related-party transactions. It added that the company refused to get an independent external examination done to allay its concerns.
Since “the evaluation performed by the (Adani) group does not constitute sufficient appropriate audit evidence for the purpose of the audit,” Deloitte said it cannot comment “if these transactions may result in possible disclosures in respect of related parties” and “whether the group should have complied with applicable regulations”. Deloitte identified three deals that it could not confirm as non-related-party transactions.
Late on Wednesday, an Adani Group spokesperson said that the audit committee of Adani Ports as well as the company were of the view that an independent examination was not appropriate since investigations by Sebi and the expert committee appointed by the SC were under way. “Deloitte’s qualification this year is owing to the pending conclusion of these investigations.”
As a result, it has issued a “qualified opinion” on the FY23 results. A qualified opinion means an audit report is not clean. In other words, an auditor has reservations about some transactions that prevents it from issuing an unqualified or clean report.
This is the first time a leading auditor has issued a qualified opinion on Adani Group‘s financial statements citing the Hindenburg report that had accused the conglomerate of financial wrongdoings. This also brings to focus the information gaps that persist in the group’s financial dealings and hampers its attempts to move past Hindenburg’s allegations.
According to Deloitte, Adani Ports told the audit firm that the three transactions identified by it were not related-party transactions. It added that the company refused to get an independent external examination done to allay its concerns.
Since “the evaluation performed by the (Adani) group does not constitute sufficient appropriate audit evidence for the purpose of the audit,” Deloitte said it cannot comment “if these transactions may result in possible disclosures in respect of related parties” and “whether the group should have complied with applicable regulations”. Deloitte identified three deals that it could not confirm as non-related-party transactions.
Late on Wednesday, an Adani Group spokesperson said that the audit committee of Adani Ports as well as the company were of the view that an independent examination was not appropriate since investigations by Sebi and the expert committee appointed by the SC were under way. “Deloitte’s qualification this year is owing to the pending conclusion of these investigations.”