India’s Adani Group plans independent audit of group companies- Mint

Jan 31 (Reuters) – India’s Adani Group is planning to
hire one of the “big six” accounting firms to assess its
corporate governance and audit practices following allegations
of fraud by short-selling firm Hindenburg, Mint newspaper
reported on Monday.

The audit will be commissioned after the group’s unit, Adani
Enterprises Ltd, completes a follow-on public
offering, and based on its findings legal options will be
sought, Mint reported, citing two people with direct knowledge
of the matter.

“The audit will include eight of the group’s listed firms.
The independent audit report will be presented to the board, and
basis the findings, the matter be taken to the court if the
board of Adani Enterprises decides so,” Mint quoted one of the
sources as saying.

The audit will include a review of certain related party
transactions, accounting practices and compliance with corporate
governance standards at the firms, the report said, adding that
it will also attempt to check whether Hindenburg’s allegations
are correct.

Adani did not immediately respond to a Reuters request
for comment outside regular business hours.

Separately, Indian bourse National Stock Exchange of
India (NSE) revised the circuit limits on Adani Transmission Ltd
, Adani Total Gas Ltd and Adani Green Energy
Ltd to 10% from 20%, according to the bourse’s website
on Monday.

These limits are set by the exchange to prevent large
movements in the price of stocks in a very short time.

The research report by Hindenburg last week

accused

the conglomerate of improper use of offshore tax havens and
flagging concerns about high debt, eroding $65 billion of the
group’s combined market value.

Adani on Sunday issued a 413-page

rebuttal

to the Hindenburg report, saying it complies with all local
laws and had made the necessary regulatory disclosures.

Adani Enterprises’ $2.5 billion secondary share sale,
launched on Jan. 27, closed its second day amid

weak investor sentiment

. The stock closed at 2,892.85 rupees, 7% below the 3,112
rupees lower end of the offer price band. The upper band is
3,276 rupees.
(Reporting by Juby Babu in Bengaluru; Editing by Anil D’Silva)