Adani Power, AEL, Adani Green: Adani Group shares crash 8% over auditor issue

Adani Group shares were reeling under pressure on Thursday following a Bloomberg report, raising red flags on the Gautam Adani-led conglomerate's long-time auditors. The media outlet, citing sources, said that the auditors of Adani Group were scrutinized by accounting regulator The National Financial Reporting Authority (NFRA). Following the announcement, shares of Adani Group crumbled up to 8 per cent on the opening tick on Thursday. Adani Group stocks have been hammered hard, following the Hindenburg Research report, released nine months earlier. Majority of the stocks are hovering around Hindenburg's suggested levels. According to the Bloomberg report, an EY member firm which audits some Adani Group companies is being scrutinized by India’s accounting regulator NFRA. SR Batliboi is the current auditors for Adani Power Ltd, Adani Green Energy Ltd, ACC, Ambuja Cements Ltd and Adani Wilmar Ltd. It also signed on the books of Adani Ports & Special Economic Zone Ltd for a decade till 2017. Recently, NFRA started an inquiry into one of the member firms of EY in India, SR Batliboi, and requested files and communications related to its audits on some of the companies controlled by Adani going as far back as 2014, the report said. Adani Power, the power utilities player, dropped about 8 per cent to Rs 289.30 on Thursday, with a market capitalization of little more than Rs 1.10 lakh crore. The scrip had settled at Rs 312.65 in the previous trading session. Adani Green Energy, another power generation firm, crashed 7 per cent to Rs 817.05 with a mcap below Rs 1.30 lakh crore, compared to its close at Rs 876.80. Adani Wilmar and Adani Total Gas dropped more than 5 per cent each to Rs 303.45 and Rs 521.95, respectively, while Adani Enterprises, the flagship company of the Adani Group, dropped about 4 per cent to Rs 2,166.80 in the early trade. Adani Ports and Special Economic Zone fell 2 per cent to Rs 754.50 on Thursday. Acquired entities like ACC, Ambuja Cements and New Delhi Television were also down up 4 per cent at the open. In its clarification in the matter 'strongly rejected' the suggestion that its businesses did not act as per the regulations and accounting standards of the jurisdictions in which it operates "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," said Adani Group. To recall, US-based short seller Hindenburg Research had in January this year published a damning report, alleging involvement of the Adani group into accounting fraud schemes and stock manipulation over the course of decades, while Adani Group refuted all the allegations. However, the matter is being heard in the Supreme court, with the next date likely to be on Monday, October 30.