Adani Ports & Special Economic Zone (APSEZ) appointing a new auditor following the resignation of Deloitte Haskins & Sells gives a certain level of comfort to investors.
Generally, auditor resignations see negative stock reactions, but it being replaced with a “reputed auditor” gives some comfort, according to a report by investment bank and financial services firm Jefferies.
The Adani group company on Saturday announced the appointment of MSKA & Associates as statutory auditor. The new auditor is an independent member firm of BDO International and also audits a number of Nifty50 firms, including HDFC Bank.
BDO International is considered among the top six auditors globally, compared to Deloitte which is considered among the top four, the note said.
Deloitte, which resigned as the auditor of APSEZ, had sought an independent external examination of US-based short-seller Hindenburg Research’s allegations. A January 24 report by Hindenburg had accused Adani Group of significant governance issues, which the latter had denied.
Separately, according to sources close to Adani Group, APSEZ is examining the auditor’s resignation, which was “arbitrary” and much ahead of end of the tenure. The group is looking at the financial implications and perception in the market following the resignations, and would take a “measured approach”. They, however, did not elaborate on the actions.
The audit committee (of APSEZ) was of the view that the grounds advanced by Deloitte for resignation as statutory auditor were not convincing or sufficient to warrant such a move, APSEZ audit committee chairman Gopal Krishna Pillai had said.