Deloitte has decided to resign as auditor of India’s Adani Ports amid concerns over certain transactions flagged in a report by Hindenburg, which the company did not wish to independently look into, a source with direct knowledge said.
Deloitte in May had pointed to certain transactions flagged by the US short-seller in its report and gave only a qualified opinion, which indicates concerns by a company’s auditor.
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Deloitte and Adani Ports did not immediately respond to Reuters’ requests for comments.
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The short-seller’s report released in January this year alleged improper use of tax havens and concerns over its debt levels, which the conglomerate denied.
The resignation comes after Deloitte asked Adani Ports to do an independent inquiry on related party transactions flagged by Hindenburg, while the company did not agree for an independent inquiry, the source said.
Deloitte’s decision to quit as Adani ports’ auditor might come as soon as Monday, the source added.
Hindenburg report battered investor confidence and wiped out about $150 billion from Adani companies’ market value.
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Shares of its group companies have rebounded but are still down by around $100 billion in value after Hindenburg’s report.
In May, a court-appointed panel said India’s markets watchdog has “drawn a blank” in investigations into the allegations against Adani group and its pursuit of the case could be a “journey without a destination.”
Bloomberg News first reported Deloitte’s plans on Friday.