Letters sent to affiliates of Deloitte, EY, KPMG, Grant Thornton, and two CA firms based in Ahmedabad; Adani Group says it complies with relevant accounting standards & laws

The National Financial Reporting Authority has shot off queries to audit affiliates of Deloitte, EY, KPMG, Grant Thornton, and two Ahmedabad-based CA firms regarding audit practices they followed while auditing Adani companies. The Adani Group said it has complied with relevant accounting standards and applicable laws.

The requested audit information extends up to FY22 and, in certain instances, covers the last decade, said a source close to the matter.

"It is a normal audit quality inspection, and the regulator does that from time to time in select cases," said the source. "What they have sent us is a templated form they send to auditors during audit quality inspections."


NFRA has been tracking the Big Four firms for the past 18 months as their affiliates audit most of the top listed companies in India.

Last year too, NFRA picked up four audits of each of the top firms and evaluated those for quality; the report has not been made public yet.

Reacting to NFRA enquiries, the Adani Group said it is compliant with the applicable laws. "We strongly reject any suggestion that Adani Group and its businesses have not acted as per the regulations and accounting standards of the jurisdictions in which we operate," the Ahmedabad-based infrastructure conglomerate said in a statement. "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."

Seasoned auditors say that the move by Deloitte to resign as Adani Ports' auditor in August could have been the trigger this time for NFRA to delve into past audits of the conglomerate.

In August 2023, Deloitte resigned as statutory auditor of Adani Ports, months after a Hindenburg Research report accused the group of financial inaccuracies. The Adani Group has steadfastly denied the charges.

The short-seller report, among other things, raised questions over Adani's accounting and audits.

In its resignation letter to the Adani audit committee, Deloitte said it was tendering the resignation with immediate effect as it was not a statutory auditor to a substantial number of Adani Group companies. Since it was an auditor to other group companies, the scope of the audit didn't extend to transactions or balances that may have occurred between these group companies and their suppliers, customers, or any other parties, said the firm.

The auditor said it wouldn't be possible to form a true and fair opinion without going into the details of various inter-group transactions. KPMG affiliate BSR & Co resigned from the Adani Green audit in May 2021.

KPMG, EY, Deloitte, and Grant Thornton did not respond to the ET questionnaire. NFRA did not respond to ET queries.

Ever since NFRA chairman Ajay Bhushan Prasad Pandey took over in March 2022, the authority has been proactively launching inquiries.

The Adani group works with a mix of audit firms.