Bengaluru: Shares of Adani group companies slid 3% to 5% on Monday after Deloitte resigned as auditor of Adani Ports, the first such move at the Gautam Adani-led conglomerate since U.S. short-seller Hindenburg's report on the company in January.
Deloitte, Adani Ports' auditor since May 2017, quit amid concerns over certain related party transactions that Hindenburg had raised and which the company did not wish to look into independently, Reuters reported on Friday.
Adani Ports said Deloitte, which does not audit any of the other six listed Adani group companies, had all the necessary information and its reason to quit was "not convincing."
Hindenburg has also alleged the billionaire Gautam Adani-led conglomerate of improper use of tax havens and other business dealings. While the group has denied all allegations, the report has led to its listed units losing more than $100 billion in market value and sparked regulatory investigations.
In fact, India's market regulator is due to submit its final report on its probe into the matter to the country's top court later in the day.
"The spotlight is back on Adani Group stocks and this time the auditor has raised concerns and resigned. Such developments are never welcomed by market participants," said Prashant Tapse, senior vice president of research at Mehta Equities.
Shares of Adani Ports fell as much as 3.7% on Monday. The flagship Adani Enterprises dropped 5.5%, while Adani Power, Adani Energy Solutions, Adani Wilmar, Adani Green Energy and Adani Total Gas declined between 3% and 5%.
"The market would have liked it if the Adani management would have made the (related party) disclosures on their own," said Avinash Gorakshakar, head of research at Profitmart Securities.
"In the near term, the Adani group stocks will likely remain under pressure and any re-rating will happen gradually when the water settles down."
Adani Ports named MSKA & Associates, an independent member firm of BDO International, as its new auditor.
