India’s accounting regulator National Financial Reporting Authority (NFRA) has reportedly initiated an inquiry into one of EY’s member firm in India, which audits five Adani group companies.

According to a Bloomberg report, the watchdog has sought files and communications concerning S.R. Batliboi’s audits on some of the Adani group firms going as far back as 2014.

The purpose, length or depth of this inquiry could not be ascertained as there were no official comments from EY or S.R. Batliboi.

However, sources told The Telegraph that this could be a “normal course of review by the NFRA as they do audit quality checks’’ and that in such an inquiry other auditors of the group may also have received a communication from the regulator. This, however, could not be confirmed.

Reacting to the report, a spokesperson from the Adani group said, ``We strongly reject any suggestion that Adani Group and its businesses have not acted as per the regulations and accounting standards of the jurisdictions in which we operate.

The Adani Group has always conducted its business in compliance with all applicable laws and regulations and is confident about its practices, governance and disclosures.”

S.R. Batliboi is the statutory auditor of five listed Adani firms, Adani Power, Adani Green Energy, Adani Wilmar, ACC and Ambuja Cements.

The inquiry by the NFRA has once again raised questions about the accounting and disclosures by the domestic conglomerate which it has stoutly defended in the past, particularly after the damaging allegations made by Hindenburg in January this year.

S.R. Batliboi had also audited the books of Adani Ports & Special Economic Zone Ltd for a decade till 2017.

Among the other group firms, Shah Dhandharia & Co is the auditor of Adani Enterprises.

In its report on the Adani group, the US-based short seller Hindenburg had raised questions on the size and capability of this “tiny firm’’.

The Adani group had defended the appointment saying all the auditors engaged by them have been duly certified and qualified by the relevant statutory bodies.

The firm resigned as the statutory auditor of Adani Total Gas in May. It was replaced by Walker, Chandiok & Co.

In August, Deloitte, Haskins & Sells LLP quit as the statutory auditors of Adani Ports and Special Economic Zone (APSEZ).

The audit firm had earlier red-flagged at least three transactions in the preceding two quarters after it was not convinced by the management’s claims that these had not been struck with related parties.