Questions of propriety in Adani Power director's audit practice

An accounting firm run by an independent director of Adani Power Ltd is the auditor for Adicorp Enterprises, the entity behind a complex transaction that involved lending ₹608.5 crore to the power producer, prompting concerns about potential conflicts of interest and the adequacy of disclosure practices.

- Varun Sood

Mukesh M. Shah, 71, an independent director and chairman of the audit committee at Adani Power, is also the founder and managing partner of Mukesh M Shah and Co., which serves as the auditor of Adicorp Enterprises, a privately held firm based out of Ahmedabad.

Transactions involving Adicorp Enterprises, Adani Power and a clutch of Adani group firms were flagged in the late-January report on the conglomerate published by the New York-based short seller and research firm Hindenburg. The transactions are as follows. Adicorp borrowed ₹622 crore in the year ended March 2020 from four Adani group firms. Of them, two privately held companies—Adani Logistics and Adani Estates—gave ₹543.1 crore and ₹10.1 crore, respectively, while two public firms—Adani Enterprises Ltd and Adani Ports and Special Economic Zone Ltd—lent ₹11.8 crore and ₹57.2 crore, respectively, according to filings with the Registrar of Companies. Subsequently, AdiCorp lent ₹608.5 crore to Adani Power during the same financial year, leading to the question, as indeed Hindenburg asked, whether the loans were effectively being routed through Adicorp to circumvent related party disclosures.