Adani may avoid stepping on Ambani's toes

A BELEAGUERED INDIAN billionaire is redrawing the contours of his empire in a way that minimises friction with his bigger rival. That may be a sensible strategy.

- ANDY MUKHERJEE

Gautam Adani can't afford a costly distraction. While his core infrastructure business is booming, there's little reprieve from the governance issues that have dogged the Adani Group since New York-based Hindenburg Research's allegations of stock-price manipulation and undisclosed related-party transactions earlier this year. Despite its strenuous denial of the short-seller's report, the conglomerate's market value has sagged more than $100 billion since January.

A fresh blow arrived on Saturday as Deloitte Haskins & Sells, the auditor of Adani's ports unit, abruptly resigned the same week June quarter results showed record revenue and operating profit. In its full-year audit of May 30, Deloitte had said that the legal opinion the group provided on the veracity of Hindenburg's allegations was inadequate and that an independent external examination was warranted. The accounting firm's August 8 quarterly review reiterated those concerns.

The auditor's exit is a timely reminder that while growth will suppress governance concerns, it won't make them go away.