COMPANIES

No Data Found

NEWS

No Data Found
Advertisement
Adani vs Hindenburg: Group CFO defends auditor Shah Dhandharia, says they support small firms

Adani vs Hindenburg: Group CFO defends auditor Shah Dhandharia, says they support small firms

Hindenburg report: Adani Group said that it is their responsibility to ensure that homegrown, small companies get all the support they require to develop into big companies. 

Anwesha Madhukalya
Anwesha Madhukalya
  • Updated Jan 30, 2023 11:23 AM IST
Adani vs Hindenburg: Group CFO defends auditor Shah Dhandharia, says they support small firmsAdani Group defends audit firm Shah Dhandaria

Adani Group, in response to Hindenburg Research’s accusation that they enlisted Shah Dhandharia, a small accounting firm to audit the conglomerate, said that it is their responsibility to ensure that homegrown, small companies get all the support they require to develop into big companies. 

Adani Group Chief Financial Officer Jugeshinder Singh, in an interview with Business Today Television Managing Editor, Siddharth Zarabi, said that the company that is accusing Shah Dhandharia of being a small firm is itself a company of 5-10 employees, who work out of a WeWork desk. “Look at the irony! Also do you think as a large Indian corporate we have no responsibility to develop Indian vendors? We have no responsibility towards developing the Indian institutional framework? So, if we support the development of a small firm to become a proper, good, accounting firm, how is that a bad thing? Is it not our responsibility? We have 21,000 small vendors,” said Singh. 

Advertisement

Also read: 'Hindenburg copy-pasted our disclosures, did no research,' says Adani Group CFO Jugeshinder Singh

He also said that Adani Enterprises is an incubator. “It's values lie in the businesses it has underneath it,” he said, further adding that the airport business has one of the Big 6 as an auditor and so do the mining services. “Those are the businesses we need audited by big firms,” he said. 

Singh further stated that Adani Enterprises will also eventually have a joint auditor from the Big 4. 

“The Airport Authority of India (AAI) also uses a panel of domestic auditors for the same purpose because they also want to develop local auditors. We use auditors from their panel, it is a requirement for the concession from the Government of India,” said the Adani Group CFO. 

Advertisement

He also stated that Adani Total Gas, that has a global presence, works with Shah Dhandharia. 

“They have seen how Shah Dhandharia works, do you think they will not say anything?” he pointed out, further adding that an accounting firm with global presence is required in case they need to sign off in the US or Europe. Which accounting firm to pick is driven by business needs, compliance requirements, and what the company is trying to achieve, said Singh. 

Singh’s defence comes after Hindenburg, in its report, said that Shah Dhandharia has no current website and the historical archives show that it has only four partners and 11 employees. It said that records show that the company pays Rs 32,000 in monthly office rent. The only other listed company it audits has a market capitalisation of $7.8 million. 

Advertisement

“Shah Dhandharia hardly seems capable of complex audit work. Adani Enterprises alone has 156 subsidiaries and many more joint ventures and affiliates, for example. Further, Adani’s 7 key listed entities collectively have 578 subsidiaries and have engaged in a total of 6,025 separate related-party transactions in fiscal year 2022 alone, per BSE disclosures,” said Hindenburg in the report. 

Hindenburg also stated that the audit partners of Shah Dhandharia who signed off on Adani Enterprises and Adani Total Gas’ annual audit reports were as young as 24 and 23 years old when they began approving the audits. “They were essentially fresh out of school, hardly in a position to scrutinize and hold to account the financials of some of the largest companies in the country, run by one of its most powerful individuals,” it said.

Also read: Gautam Adani is to infra what Steve Jobs was to smartphones: CFO Jugeshinder Singh

Also read: ‘Adani Group draped itself in Indian flag while systematically looting nation,’ says Hindenburg

 

Published on: Jan 30, 2023 11:14 AM IST
Post a comment0