Adani Auditor EY Faces Inquiry by Accounting Regulator NFRA
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The inquiry was started in recent weeks against S.R. Batliboi, one of EY's member firms in India, the persons aware of the matter told the news agency.
The regulator has requested files and communications related to its audits on some of the companies controlled by billionaire Gautam Adani going as far back as 2014, the report claimed, adding that it was unclear how long NFRA’s inquiry could take or what repercussions, if any, could be faced by the auditor and Adani’ Group companies.
S.R. Batliboi, notably, is the statutory auditor of five listed Adani companies that produce about half of the group’s revenues. The inquiry, as claimed in the report, underscores the lingering questions around accounting and disclosures by the ports-to-power conglomerate that faced a brutal short seller attack in January.
Adani Group, which had forcefully denied Hindenburg’s allegations of corporate malfeasance, is also under a court-mandated probe by market regulator SEBI.
Besides being the current auditors for Adani Power Ltd., Adani Green Energy Ltd., the consumer goods firm Adani Wilmar Ltd. and the two cement makers the tycoon acquired from Holcim Ltd. last year, S.R. Batliboi also signed off on the books of Adani Ports & Special Economic Zone Ltd., the conglomerate’s crown jewel, for a decade leading to 2017.
Indian law prohibits foreign accounting firms from registering as auditors in the country. That’s why Big Four firms including EY operate through independently run affiliates.
Hindenburg raised questions over Adani’s accounting and audits in a January report that erased more than $150 billion in market value at one point from the conglomerate’s listed companies.
The group said in a January 29 rebuttal that its firms are audited by “duly certified and qualified" professionals. (With Bloomberg inputs)
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