WHY DELOITTE & ADANI PORTS PARTED WAYS

The board of Adani Ports and SEZ (APSEZ) last week appointed MSKA & Associates as the company's auditors. Earlier, it had, on the advice of its audit committee, accepted the resignation of Deloitte Haskins &Sells as statutory auditors. We delve into the reasons for Deloitte's resignation and take a look at its opinions on the accounts

Differences between Deloitte and APSEZ

DELOITTE HAD asked for a wider role as auditors of other listed Adani firms as it believed it couldn't give the correct opinion without examining inter-group transactions. However, APSEZ said group-wide appointments were outside of the remit of its board.

The other companies, it said, were independent, with separate boards and minority shareholders. Deloitte's point seems to have been that the scope of the audit didn't extend to transactions or balances that may have occurred between group firms suppliers, customers or other parties. Auditors are now wary of fraud and malpractices and are reluctant to take on responsibilities without access to complete information. APSEZ's audit committee felt Deloitte's reasons for quitting were not convincing.

Qualified opinion by Deloitte on EPC contract

IN A QUALIFIED opinion on the consolidated financial statements of APSEZ, Deloitte observed APSEZ had entered into substantial EPC (engineering, procurement, and construction) purchase contracts with a fellow subsidiary-Contractor-of a party identified in the allegations made by the Hindenburg report.