Adani Total’s auditor quits, cites other work

TNN

Mumbai: Months after Hindenburg Research raised questions over the ability of a “tiny firm” Shah Dhandharia & Co to audit the books of a large conglomerate like Adani, the accounting company has resigned from Adani Total Gas. It has cited professional preoccupation in other assignments to be the reason for its resignation.

The resignation comes within 10 months of it being reappointed as Adani Total Gas’s statutory auditor for a second term of five years. Shah Dhandharia, which converted into a limited liability partnership (LLP) from a partnership firm on April 9, 2021, is also the auditor of the conglomerate’s flagship Adani Enterprises, which houses the airports and data centre businesses.

“Our resignation does not result from an inability to obtain sufficient appropriate audit evidence,” said Shah Dhandharia & Co’s partner Shubham Rohatgi in the resignation letter. “There are no other circumstances connected with our resignation which we consider should be brought to the notice of the board.”

Adani Total Gas has appointed Walker Chandiok & Co, an affiliate of Grant Thornton, in place of Shah Dhandharia for five years.

In its report, Hindenburg had questioned the Adani Group’s decision to hand over such a big audit mandate to a virtually unknown entity. “The tiny firm” with a handful of people did “not seem capable of conducting a complex audit” of Adani Total Gas and Adani Enterprises, it said.

According to Hindenburg’s findings, Shah Dhandharia, also based in Ahmedabad, with “no current website”, had just four partners and 11 employees, some of them being as young as 23-24 years of age. It also pointed out that the partner, Shubham Rohatgi, who signed off Adani companies’ books, was only 24 when he was first appointed and now 28 years.

The Adani Group, however, justified its selection of Shah Dhandharia in the aftermath of the Hindenburg allegations. Its CFO Jugeshinder Singh had said as a large corporate it is “our responsibility to develop Indian vendors”. “So, if we support the development of a small firm to become a proper, good, accounting firm, how is that a bad thing?” he had asked.

In July 2022, shareholder advisory firm Institutional Investor Advisory Services (IiAS) too had raised the issue of Shubham Rohatgi’s capability, saying he did not have the “requisite experience to audit” the financial statements of a Nifty 100 company.