Deloitte has decided to resign as auditor of India’s Adani Ports over concerns about transactions flagged in a report by the United States-based short seller Hindenburg, the Reuters news agency reports, citing an unnamed source with direct knowledge of the matter.
Deloitte in May had pointed to certain transactions flagged by Hindenburg and gave a qualified opinion, which indicates concerns by a company’s auditor.
The auditor’s move casts a new shadow over the financial management at stocks had lost about $150bn in market value after Hindenburg’s report but have since regained some ground after it paid its debt and gained investor confidence.
Deloitte’s resignation comes after it asked Adani Ports to conduct an independent inquiry on related party transactions flagged by Hindenburg, but the company did not agree, the source said.
Deloitte and Adani Ports did not immediately respond to Reuters’ requests for comment on Friday.
Deloitte’s decision to quit as Adani Ports’ auditor might come as soon as Monday, the source added.
In May, a court-appointed panel said India’s markets watchdog had “drawn a blank” in investigations into the allegations against Adani Group and its pursuit of the case could be a “journey without a destination”.
Last month, Adani Chairman Gautam Adani called Hindenburg’s report a “malicious attempt” at damaging the conglomerate’s reputation and said the group was confident of its governance and disclosure standards after the panel found no lapses.
Bloomberg News first reported Deloitte’s plans on Friday.