French energy giant TotalEnergies has decided to halt new investments in its collaborative projects with the Adani Group. This move comes after learning that the Adani Group had not disclosed an ongoing U.S. corruption investigation while working on deals together.
Recently, U.S. authorities charged Gautam Adani, the founder of the Adani Group, in a bribery scandal. TotalEnergies has been a significant foreign partner in various renewable energy initiatives in India with the Adani Group, although these projects are not linked to the U.S. probe.
Adani is among eight individuals accused in a case alleging they offered bribes to Indian officials to secure favorable solar power contracts estimated to produce profits exceeding $2 billion. The Adani Group has dismissed the U.S. allegations as unfounded and stated that they will pursue all legal options available.
On Monday, TotalEnergies announced that it would refrain from injecting any new funds into ventures associated with Adani until the situation is clarified. The French company stated that it had not been informed about any investigation related to the supposed corruption scheme.
Following TotalEnergies’ announcement, Adani Green Energy’s shares fell by 9 percent.
The Adani Group has been striving to recover from accusations of accounting fraud and stock manipulation from last year, made by U.S. firm Hindenburg Research, which the company also refutes.
In light of the recent indictments, the Adani Group released an update, revealing financial stability. They reported achieving over $10 billion in earnings before interest, taxes, depreciation, and amortization for the first half of the financial year, forecasting $12 billion for the entire year. The group reassured stakeholders that its companies possess enough liquidity to manage all debt obligations for at least the next twelve months.
Even though shares of Adani Enterprises and Adani Ports saw slight rises of 1.6 percent and 2.3 percent respectively, bond prices in U.S. dollars for the group remained down.
In the Indian parliament, opposition members disrupted proceedings to call for a probe into the bribery scandal. Congress party president Mallikarjun Kharge stressed that the case could have serious consequences for the country’s reputation internationally, urging for immediate discussions on this pressing issue.
Gautam Adani, 62, is considered one of the wealthiest individuals in Asia and is known for his close ties to Prime Minister Narendra Modi.