14-Aug-2023
2 mins read
Stocks Slide: Deloitte’s Exit Sends Shockwaves Through Market
Today wasn’t a great day for the Adani Group’s stocks on the Bombay Stock Exchange (BSE). The news of Deloitte Haskins & Sells LLP throwing in the towel as the auditor for Adani Ports and Special Economic Zone (SEZ) seemed to catch everyone off guard. The stocks dipped by a noticeable 5%, and needless to say, people were talking.
Why the Sudden Resignation?
So, here’s the scoop. Deloitte decided to call it quits due to some serious doubts about specific transactions that made headlines in a report from Hindenburg Research. This report, which came out earlier this year, pointed fingers at Adani Group for things like using tax havens, pulling off intricate deals with related parties, and piling up quite a bit of debt. Deloitte wasn’t too comfortable with all this and even suggested an independent investigation into these claims. But Adani’s board was firm – they insisted these allegations wouldn’t mess with their financial statements.
Out with the Old, In with the New
In the aftermath of Deloitte’s exit, Adani Ports didn’t waste any time and roped in MSKA & Associates Chartered Accountants to take the auditor reins. It’s a move aimed at patching up investor confidence and putting to rest those pesky concerns about financial shadiness.
Deloitte’s Plea for a Deeper Dive
Before waving goodbye, Deloitte didn’t go quietly. They had actually asked for an external and unbiased review of all the claims that Hindenburg Research was throwing around. But guess what? The company’s audit committee and Adani’s subsidiary weren’t really sold on the idea – they believed these claims wouldn’t mess with their financial stability.
Deloitte shares 163-page report to BSE
Deloitte wrote this massive 163-page letter to the Bombay Stock Exchange (BSE) to spell out exactly why they were quitting. They mentioned about their worries dating back to May, specifically about certain transactions highlighted in Hindenburg’s report. These transactions involved money coming from a contractor that was front and centre in the report. Deloitte’s big concern? Making sure Adani Ports’ financial statements were still on the up and up despite all these allegations.
Bottom Line: A New Chapter for Adani Group’s Financial Saga
Deloitte’s resignation is like a rock tossed into a pond – the ripples are still spreading. The spotlight is back on Adani Group’s financial practices, and with a fresh audit firm stepping in, there’s a glimmer of hope that things might straighten out. The SEBI investigation and ongoing debates make it clear that this story is far from over. For now, everyone’s keeping a close eye on how this drama will affect Adani Group’s reputation and their bottom line.
Adani Group’s Recent Performance
During the first quarter of FY24, Adani Ports and Special Economic Zone (APSEZ) achieved its best performance ever. Despite facing a six-day disruption from Cyclone Biparjoy, the company managed to increase its market share in India to 26%, a growth of 200 basis points. APSEZ’s efforts to enhance efficiency led to strong results, including record-high cargo volumes, revenue, and earnings. With newly acquired ports performing well and total cargo volumes exceeding 100 million metric tons, APSEZ remains on track to reach its annual target of 370-390 million metric tons for FY24.