Auditor named in Hindenburg report resigns from Adani firm

NEW DELHI: A small Ahmedabad-based chartered accountancy firm, whose appointment was questioned by a US short seller in its scathing report against the conglomerate run by billionaire Gautam Adani, has resigned due to “pre-occupation”, Adani Total Gas Ltd said.

Hindenburg Research in its January 24 report that levelled allegations of fraud, stock manipulation and money laundering against the Adani group, had also raised the issue of the size and capability of the firms auditing the conglomerate.

Adani group has repeatedly denied all allegations.

Hindenburg stated that the independent auditor for the group’s flagship firm, Adani Enterprises, and its city gas retailer Adani Total Gas Ltd is a “tiny firm” called Shah Dhandharia. “Shah Dhandharia seems to have no current website. Historical archives of its website show that it had only 4 partners and 11 employees. Records show it pays Rs 32,000 (USD 435 in 2021) in monthly office rent. The only other listed entity we found that it audits has a market capitalization of about Rs 640 million (USD 7.8 million),” it had stated.

In a stock exchange filing, Adani Total Gas Ltd said, “We wish to inform that M/s. Shah Dhandharia & Co. LLP, Chartered Accountants, have resigned as the statutory auditors of the company i.e., Adani Total Gas Limited (ATGL) with effect from May 2, 2023.”

It attached the May 2, 2023 resignation letter from the auditor. In the letter, the auditor said it was given a second term of 5 years on July 26, 2022, and has completed the audit of the company for the financial year ended March 31, 2023. “We have carefully evaluated and due to increased professional pre-occupation in other assignment, we regrettably propose our resignation,” it said.