Adani Group's auditor EY under NFRA scanner: Here's why
The National Financial Reporting Authority (NFRA) has launched an investigation into S.R. Batliboi, an EY member firm in India and a long-standing auditor for the Adani Group. Bloomberg sources familiar with the matter disclosed that the regulator has requested documents and correspondence related to audits of some of Gautam Adani's businesses, dating back to 2014. The length of the investigation and potential consequences for the auditor and Adani Group remain uncertain.
S.R. Batliboi's role in auditing Adani Group companies
S.R. Batliboi acts as the statutory auditor for five publicly traded Adani companies, which account for roughly half of the group's revenue. These firms include Adani Power, Adani Green Energy, Adani Wilmar, and two cement manufacturers acquired from Holcim Ltd in the previous year. Furthermore, Batliboi audited the financial records of Adani Ports & Special Economic Zone Ltd, the conglomerate's flagship enterprise, for ten years until 2017.
Hindenburg's allegations and Adani Group's response
Hindenburg Research raised concerns about the Adani Group's accounting and auditing practices in January. This resulted in a market value loss of over $150 billion for the conglomerate's listed companies at one point. In response, the Adani Group issued a statement, asserting that its firms are audited by "duly certified and qualified" professionals. The group is also subject to a court-ordered investigation by market regulator SEBI following allegations of corporate wrongdoing.
