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Back-to-back responses from the Adani Group with strong statements criticizing the Hindenburg report as malicious have failed to stem its stock market slide. However, Adani Enterprises, which launched its follow-on public offering (FPO) on Friday, and Adani Total Gas are audited by Shah Dhandharia & Co.
In its 106-page report, Hindenburg claimed that a small company called Shah Dhandharia with auditors in their early 20s signed off on the accounts.
According to Adani's presentation, Hindenburg asked 89 questions in total. While some of these questions refer to transactions with related parties, the DRI Directorate of Revenue Intelligence, and court cases. However, there are 21 questions in total that cannot be the result of any research over a period of 2 years or any claims as disclosed in the following public documents from 2015 onwards.
Responsible for audit
Dharmesh Parikh & Co. and Shah Dhandharia & Co. are the two companies largely responsible for the audit of the Adani group. But that's not the only thing they have in common. Furthermore, the auditor signing the books of the conglomerate's flagship company has only five years of professional experience.
“Shah Dhandharia's audit partners who respectively signed off on the annual audits of Adani Enterprises and Adani Total Gas were just 24 and 23 years old when they began passing the audits. They were basically fresh out of school, barely in a position to examine and hold accountable the finances of some of the largest companies in the country, run by one of its most powerful individuals,”
the US-based short seller said.
The report further adds,
“Shah Dhandharia hardly seems capable of complex audit work. Adani Enterprises alone has 156 subsidiaries and many more joint ventures and affiliates, for example. In addition, Adani's 7 key publicly traded entities collectively have 578 subsidiaries and have engaged in a total of 6,025 separate related party transactions in fiscal 2022 alone, according to BSE disclosures,”
Reappointed as Adani Enterprises
Last year, Shah Dhandharia & Co LLP was reappointed as Adani Enterprises' Statutory Auditor for five years until 2027.
Second, the group said that less than 4 percent of the developer group's stake was encumbered in the form of a loan-versus-equity pledge.
But the presentation did not provide direct answers to the 84 questions that the Hindenburg report had thrown at the Adani group. Adani's filing said 21 of these questions were linked to related-party transactions, rated as questionable by Hindenburg, that had been disclosed in various public documents since 2015.
Know all about Shah Dhandharia & Co
Established in the year 1990, Shah Dhandharia And Company in Mithakhali is listed in CA Audit in Ahmedabad. Shah Dhandharia and Co are registered with the Registrar of Companies, Ahmedabad, and its total contribution obligation is Rs. 100,000.
The nominated partners of Shah Dhandharia & Co Llp are Pratik Anilbhai Vyas, Harshil Amishkumar Shah, Pravinkumar Rajendraprasad Dhandharia, Shubham Rohatgi, Karan Dineshbhai Amlani.
The end date of the last fiscal year of Shah Dhandharia & Co LLP for which the statement of account and solvency has been submitted is N/A and according to the records of the Ministry of Corporate Affairs (MCA).
Read More
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