Adani Group, the Indian conglomerate whose accounting practices have come under fire from a short seller, last year shifted the audit of its British subsidiaries from a Big Four firm to one outside the ranks of the 10 biggest in the UK.
Indian billionaire Gautam Adani’s empire has been reeling since US short seller Hindenburg Research last month accused the group of stock price manipulation and fraud.
In its almost 100-page report Hindenburg highlighted Adani’s use of a “tiny firm” in India as one of its main auditors. In a lengthy rebuttal denying the allegations, the Adani Group said that its companies “follow a stated policy of having global big 6 or regional leaders as statutory auditors”.
Corporate filings show that the 2022 accounts for Adani’s UK subsidiaries were audited by Crowe UK. The firm is the 12th largest in the UK, according to Accountancy Age’s rankings and its wider global network is outside the top six in the world.
Adani’s British entities are made up of a portfolio of renewable power plants across India that Adani Green Energy Limited, which is listed in Mumbai, acquired from SoftBank Group and Bharti Enterprises in 2021.
Adani Green Energy Limited is just one of 10 listed companies that the conglomerate controls in India, which span power and energy companies to ports and airports.
Following the $3.5bn sale, Adani changed the auditor of Adani Energy Holdings Limited, the main UK holding company that houses the subsidiaries, from Big Four firm Deloitte to Crowe.
Crowe UK earned £143,000 for its 2022 audit of Adani Energy Holdings Limited, down from the £257,000 that Deloitte charged for its previous audit.
SoftBank had its main holding company in the UK, which is why accounts for these Adani subsidiaries are audited in Britain even though the power plants are in India.
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 told the Financial Times that while Adani’s listed entities were audited by “the global big 6”, the group “likes to promote smaller firms as a matter of practice for its non-listed entities”.
“Crowe UK LLP is one such firm,” he said, noting that Crowe’s global network is in the top 10 accounting networks in the world.
Shares in Adani Green Energy Limited have plunged almost 50 per cent since Hindenburg published its allegations. 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.
Newatia added that he acts as consultant to the Adani Group and that Gautam Adani had asked him to serve as director of its UK companies because he is based in London.
“He’s a very honourable and visionary, first-generation entrepreneur,” Newatia said of the Indian mogul.
In a statement, Adani Green Energy Limited told the FT that “SoftBank had a UK holding company and thus primary audit was in [the] UK”, whereas the primary audit for the listed Indian parent company is in India and its “auditor is EY, global top 6”.
Crowe UK declined to comment.
Additional reporting by Michael O’Dwyer