Adani shares crack up to 7.5% on reports of auditor facing NFRA scrutiny

Adani group shares were under pressure on October 26 following a report that the one of the auditors of the power-to-port conglomerate were being “scrutinised” by the country’s accounting regulator the National Financial Reporting Authority (NFRA).

The NFRA requested files and communications from an EY member firm, SR Batliboi, which audits five Adani group companies, a Bloomberg report said. Adani Power, Adani Green Energy, Adani Wilmar, along with cement players Ambuja Cements and ACC are audited by this company.

SR Batliboi also signed off on the books of Adani Ports & SEZ until 2017, the report said.

Also read | Adani auditor EY faces accounting regulator inquiry

Flagship Adani Enterprises plummeted 3.9 percent to an intraday low of Rs 2,167.05 on the NSE. The fall mirrored across the group, with Adani Ports dipping 1.9 percent to Rs 754.50, Adani Power slipping 7.5 percent, Adani Energy Solutions 4.6 percent and Adani Green Energy fell 6.9 percent.

A Adani group spokesperson said, “We strongly reject any suggestion that Adani Group and its businesses have not acted as per the regulations and accounting standards of the jurisdictions in which we operate. The Adani Group has always conducted its business in compliance with all applicable laws and regulations and is confident about its practices, governance and disclosures.”

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In August, the board of Adani Ports accepted the resignation of Deloitte Haskins & Sells LLP as the company’s auditor, replacing it with MSKA & Associates Chartered Accountants.

Established in 2018, NFRA is a regulator of laws and professional guidelines within India’s auditing sector. The body is allowed to levy penalties and prohibit audit agencies and individual auditors from practicing, with some bans extending up to ten years. Over the past five years, over 40 individuals have been debarred.

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