The National Financial Reporting Authority (NFRA), the nation's accounting body, has opened an investigation against Adani Group's longstanding auditors Ernst & Young (EY).
The NFRA's action came on 25 October, according to a Bloomberg report, which cited sources with knowledge of the issue.
According to those with knowledge of the situation, the investigation was initiated against S.R. Batliboi, one of EY's member companies in India, in the last few weeks.
The report stated that the regulator has asked for records and correspondence pertaining to its audits on a few of the businesses owned by billionaire Gautam Adani dating back to 2014. It further stated that it was uncertain how long the NFRA's investigation would take or what consequences, if any, the auditor and the Adani Group companies might have to deal with.
The statutory auditor of five listed Adani firms, which generate roughly half of the group's revenue, is S.R. Batliboi. According to the article, the investigation highlights unanswered concerns over the accounting and disclosures made by the ports-to-power company, which was the target of a vicious short seller campaign in January.
The market watchdog SEBI is conducting an investigation into Adani Group, which had vehemently refuted Hindenburg's claims of corporate wrongdoing. The investigation was ordered by a court.
S.R. Batliboi not only approved the books of Adani Ports & Special Economic Zone Ltd., the conglomerate's crown jewel, for ten years prior to 2017, but he is also the current auditor for Adani Power Ltd., Adani Green Energy Ltd., the consumer goods company Adani Wilmar Ltd., and the two cement manufacturers the tycoon purchased from Holcim Ltd. last year.
In a study published in January, Hindenburg questioned Adani's accounting and auditing practises, which at one point caused the listed companies of the conglomerate to lose more than $150 billion in market value.
In a response dated January 29, the group claimed that its enterprises are audited by "duly certified and qualified" experts.