NFRA Initiates Inquiry into EY's Audits of Adani Group Companies

26 Oct 2023 , 11:24 AM

India’s National Financial Reporting Authority (NFRA) has initiated an inquiry into EY’s member firm in India, responsible for auditing five Adani group companies. The NFRA has requested files and communications related to S.R. Batliboi’s audits of Adani group firms dating back to 2014.

The purpose and depth of the inquiry remain unclear as there have been no official comments from EY or S.R. Batliboi. Sources suggest that such inquiries are part of NFRA’s routine audit quality checks, and other group auditors may have received similar communication from the regulator.

The Adani group has expressed confidence in its compliance with all applicable laws and regulations. S.R. Batliboi serves as the statutory auditor for five listed Adani firms, including Adani Power, Adani Green Energy, and others.

The inquiry raises questions about the group’s accounting and disclosures, particularly in light of previous allegations. Hindenburg, a US-based short seller, had previously questioned the capabilities of S.R. Batliboi.

The audit firm had resigned from its role as the statutory auditor of Adani Total Gas and was replaced by Walker, Chandiok & Co. In August, Deloitte, Haskins & Sells LLP also quit as the statutory auditors of Adani Ports and Special Economic Zone (APSEZ).

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