Adani Ports SEZ shares decline more than 3% as Deloitte resigns as statutory auditor
APSEZ announced the appointment of MSKA & Associates as the new auditor. The resignation by Deloitte came weeks after the consultancy and tax advisory firm raised concern over certain transactions that were highlighted in a report by Hindenburg Research.
Adani Ports and Special Economic Zone (APSEZ) shares declined more than 3 percent on Monday following the resignation of Deloitte as the statutory auditor of the company.
The stock opened lower and fell further by 3.6 percent to hit a low of Rs 771 apiece on BSE in morning deals.
Adani Ports SEZ on August 12 announced that its board had accepted the resignation of Deloitte Haskins & Sells LLP from the position of statutory auditors of the company and its material subsidiaries.
APSEZ also announced the appointment of MSKA & Associates as the new auditor.
The company also stated that there were no other reasons other than those mentioned in the resignation letter received from the statutory Auditors dated August 12, 2023.
Resignation after flagging 3 transactions mentioned in Hindenburg report
The resignation by Deloitte came weeks after the consultancy and tax advisory firm raised concern over certain transactions that were highlighted in a report by Hindenburg Research.
One of the flagged transactions was related to recoveries from a contractor identified in the report.
In its auditor’s report on the fourth quarter and 2022-23 financials of APSEZ, Deloitte stated that it could not attest to the company's statement that the transactions with three entities were unrelated parties as no independent external examination has been done to prove the claims.
Deloitte sought a wider audit of Adani group companies
Deloitte’s resignation as auditor comes after the financial services firm highlighted lack of a wider audit role as auditors of the other listed entities under Adani portfolio at a recent meeting.
Denying the request, APSEZ stated that it was not within the remit of the firm and its board to recommend group-wide appointments as other listed Adani portfolio companies are completely independent, with separate boards, executive teams and minority shareholders.
"Following this, Deloitte was not willing to continue as APSEZ's statutory auditor and, therefore, it was agreed to amicably end the client-auditor contractual relationship between APSEZ and Deloitte," APSEZ said.
The Audit Committee of the board was of the view that the grounds advanced by Deloitte for resignation as Statutory Auditor were not convincing or sufficient to warrant such a move, it stated.
Deloitte has been Adani Ports and Special Economic Zone’s (APSEZ) statutory auditor since May 2017. In July 2022, APSEZ reappointed Deloitte as its statutory auditor for another term of five years. Almost a year after the reappointment, Deloitte resigned as auditor with effect from August 12.
APSEZ shares were trading 2.75 percent lower at Rs 778.65 apiece on BSE at 10.47 AM.