TotalEnergies suspends fresh funding in Adani

TotalEnergies has suspended new investments in the Adani group following a US indictment against chairman Gautam Adani and other company executives, the French energy firm said this week.

TotalEnergies’ decision comes after the US Department of Justice indicted the Adani Group for allegedly paying $265 million in bribes to secure solar power contracts in India.

“Until the accusations against the Adani group individuals and their consequences have been clarified, TotalEnergies will not make any new financial contribution as part of its investments in the companies,” the French firm said in a statement on Monday.

TotalEnergies, which is not targeted nor involved in the facts described by such indictment, will take all relevant actions to protect its interests as minority (19.75%) shareholder of Adani Green Energy Ltd (AGEL) and as a joint-venture partner (50%) in project companies with AGEL.

TotalEnergies said its investments in Adani’s entities were fully compliant with applicable laws and with TotalEnergies’ internal governance processes under due diligence and representations made by the sellers.

The French energy company said it was unaware of an investigation into the alleged corruption scheme.

At the beginning of 2021, TotalEnergies acquired a 19,75% stake in AGEL. In tandem with the French energy company’s strategy to enhance its renewable energy portfolio in India, it acquired a 50% stake in 3 joint ventures operating renewable assets (AGEL23 in 2020, AREL9 in 2023, AREL64 in 2024).

Apart from Gautam Adani, the US Department of Justice indictment accused Adani’s nephew, Sagar R. Adani, and Vneet S. Jaain—both senior executives at AGEL; Cyril Sebastien Dominique Cabanes, a director on Azure Power Global Ltd board; other top Azure officials Ranjit Gupta and Rupesh Agarwal; and Canadian pension fund Caisse de Depot et Placement du Quebec (CDPQ’s) Saurabh Agarwal and Deepak Malhotra.

The Indian conglomerate, in a statement to the stock exchanges on Tuesday, said “no new financial commitment with TotalEnergies” is under discussion. “Hence…will not have any material impact on the company’s operations or its growth plan,” it said.

In a separate development, Florida-based investment firm Good Quality Group Partners affirmed its faith in the Adani group. The firm expected that the Indian government would back the conglomerate. In a note to investors, however, GQG Partners mentioned that it expects the investigations to be long-drawn and may hurt Adani Group’s ability to tap foreign capital.

Quoting the official communique of GQG Partners, the Mint reported, “As investors in broad area of companies, globally, we take any indictment very seriously. That said, we recognize the distinction of the allegations of the Individuals vs the companies. We believe the fundamentals of the companies we are invested remains sound.”

As of 31 October 2024, the investment company manages $159.4 billion for investors, including several pension funds, sovereign funds, wealth management firms, and other financial institutions worldwide.