India’s accounting regulator is investigating an EY member firm that audits five companies that are part of billionaire Gautam Adani’s eponymous conglomerate, a source familiar with the matter said on Wednesday.
The National Financial Reporting Authority (NFRA) started an inquiry into S.R. Batliboi a few weeks ago, the source said, declining to be named as the person is not authorised to talk to the media on the matter.
S.R. Batliboi currently audits three listed Adani group firms — Adani Power, Adani Green Energy and Adani Wilmar — as well as recently acquired cement companies ACC and Ambuja Cements.
“The inquiry is a part of the investigation going on regarding Adani companies and all auditors who have audited Adani companies will go through the same process,” the source said, without sharing further details.
EY India, S.R. Batliboi and the NFRA did not respond to Reuters’ requests for comments. Bloomberg News first reported the news.
The Bloomberg News report said the regulator had requested files and communications related to Batliboi’s audits on some Adani-controlled companies going as far back as 2014, citing people familiar with the matter.
It was not clear how long the inquiry could take or the repercussions, if any, for either party, the report said.
In a statement on Wednesday, Adani Group rejected any suggestions that the company and its business have not acted as per the regulations and accounting standards of the jurisdictions they operated in.
“The Adani Group has always conducted its business in compliance with all applicable laws and regulations and is confident about its practices, governance and disclosures,” the statement said.
The news comes months after the Adani conglomerate was thrown into a turmoil after short-seller Hindenburg accused the group of improper use of tax havens and other business dealings, allegations it has denied.
In August, Deloitte resigned as auditor of Adani Ports , the first such move since that report in January, amid concerns over certain related-party transactions that Hindenburg had raised and which the company did not wish to look into independently.
The conglomerate’s seven listed firms lost about $150 billion of their combined market capitalisation after the Hindenburg report and have only recovered a part of those losses after paying down some debt.
