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Adani Group, the Indian conglomerate accused of accounting fraud by a US short seller, has changed the auditor of its main UK subsidiaries to a firm with four partners.
It is the latest audit shake-up in Indian billionaire Gautam Adani’s business empire since Hindenburg Research accused the group of stock price manipulation and fraud in January, triggering a stock market sell-off that wiped billions from the conglomerate’s value.
The US short seller flagged Adani’s use of a “tiny firm” in India called Shah Dhandaria & Co as one of its main auditors, prompting the conglomerate to state in a rebuttal that its companies “follow a stated policy of having global big 6 or regional leaders as statutory auditors”.
In the UK, Adani Energy Holdings Limited and its subsidiaries filed annual accounts with Companies House last month that were audited by Ferguson Maidment & Co, a London-based firm that has four partners.
Adani’s UK subsidiaries were previously audited by Crowe UK, which is the 12th largest accountancy firm in the UK, according to Accountancy Age’s rankings. Crowe resigned as auditor in March two months after Hindenburg published its 100-page report.
Crowe told the Financial Times that there “were no reasons or matters connected with the firm’s resignation that we considered should be brought to the attention of members or creditors of the companies”.
Adani had already shifted the audit of these UK entities — which are holding companies for renewable energy projects in India — away from a Big Four auditor. Adani acquired the group of companies in 2021 from Japan’s SoftBank, which previously used Deloitte as their auditor.
Vivek Kapoor, the Ferguson Maidment partner who signed off on Adani Energy Holdings’ financial statements for the year ended 31 March 2023, declined to comment on the audit, citing client confidentiality. He added that “Ferguson Maidment & Co can trace its history to over 130 years and the firm has always had high-profile clients”.
The firm traces its roots to Alexander Fletcher Ferguson, who was the first British chartered accountant to establish an audit firm in India in 1893. He returned to the UK and set up a separate firm, which decades later became Ferguson Maidment when it merged with Maidment & Co in 1981.
Ferguson Maidment’s own accounts at Companies House list it as a “micro company” with only £4 in assets. Kapoor told the FT that these accounts relate to “a non-trading dormant company” that “was historically set up to protect the name of the firm”, however. He did not respond to a further question on where the company’s main accounts are filed.
Adani Group did not respond to a request for comment on the change in auditor. Adani had denied Hindenburg’s allegations.
Adani Energy Holdings Limited is a subsidiary of Adani Green Energy Limited, which is one of 10 listed companies that the conglomerate controls in India, ranging from power and energy companies to ports and airports. TotalEnergies owns a 20 per cent equity stake in Adani Green Energy.
Adani Green Energy is jointly audited by SRBC & Co, an Indian partner firm of Big Four group EY, and Dharmesh Parikh & Co, a smaller firm based in the city of Ahmedabad, where Adani has its headquarters. These auditors say they rely on work by the other accounting firms who scrutinise Adani Green’s subsidiaries.
The sole director of London-based Adani Energy Holdings Limited and its UK subsidiaries is Sanjay Newatia, a former Credit Suisse banker who now runs SKN Advisors, which describes itself as a “bespoke consultancy serving corporates and ultra-high net worth clients across UK, India and Middle East”.
Newatia did not respond to requests for comment on the change in auditor. He told the FT in February that Adani “likes to promote smaller firms as a matter of practice for its non-listed entities”.
Crowe is not the only firm to quit as auditor of an Adani company since Hindenburg published its lengthy report. Deloitte in August resigned as auditor of Adani Ports and Special Economic Zone, the group’s logistics unit. It cited Adani’s refusal to have an independent party properly assess Hindenburg’s claims, as one of the reasons for stepping down.
Shah Dhandaria also resigned from Adani Total Gas, but remained auditor of Adani Enterprises, its flagship group.
One of the firm’s partners, Shubham Rohatgi, rejected Hindenburg’s criticism that the firm was small and inexperienced, saying that an auditor’s certificate of practice does not differentiate “between a young aged auditor and a veteran” and that it now had five partners rather than four as Hindenburg stated.
He made the comments in an interview with Adani Watch, a website which tracks Adani and is sponsored by the Bob Brown Foundation, an Australia-based environmental non-profit.
