French Oil Major TotalEnergies Suspends Fresh Investment In Adani Joint Ventures

French energy giant TotalEnergies SE announced on Monday that it will pause new investments in the Adani Group pending the outcome of an ongoing corruption investigation. The investigation involves Gautam Adani, the group’s founder, and two other executives, who are accused of allegedly paying $265 million in bribes to Indian officials to secure solar power contracts.

TotalEnergies, a significant investor in Adani’s ventures, including Adani Green Energy Ltd (AEGL) and Adani Total Gas Ltd (ATGL), clarified that it was not aware of the investigation prior to the indictment. The French firm emphasized that the indictment targets individuals, not the companies within the Adani Group.

TotalEnergies Reaffirms Commitment to Ethical Investment Practices

In its official statement, TotalEnergies highlighted that it is not involved in the alleged corruption and that its investments were made in full compliance with the law. The company holds a 19.75% stake in AEGL and a 50% stake in joint ventures producing renewable energy, alongside a 37.4% stake in ATGL.

“We reject corruption in any form, and while we are not directly implicated in the allegations, we will monitor the situation closely and protect our interests,” TotalEnergies said. It further stated that until the situation is clarified, it would halt any additional investments in Adani Group companies.

GQG Partners Continues to Back Adani Group Amid Controversy

On the other hand, GQG Partners, a global investment firm with an exposure of $8.1 billion in Adani companies, has voiced its continued support for the Adani Group. GQG maintains that despite the serious bribery allegations related to AEGL, the company’s fundamental business outlook remains strong.

GQG explained that the allegations are confined to Adani Green Energy Ltd and do not involve other Adani entities. The firm also pointed out that government investigations of this nature typically take years to resolve, often leading to reduced penalties or fines rather than major operational disruptions.

Impact of the Allegations on Adani Group

The Adani Group has firmly denied the allegations, calling them baseless and vowing to pursue all available legal remedies. The group’s stocks suffered significant losses following the Hindenburg Research report last year, but many of these losses were regained before the recent indictment in a New York court.

TotalEnergies, which first partnered with Adani in 2018, had previously paused a planned $50 billion hydrogen project investment in early 2023, pending the results of an audit triggered by the Hindenburg allegations. Despite this, the firm continues to hold significant stakes in Adani’s renewable energy and gas ventures.

Investment Freeze Amid Controversy

The latest decision by TotalEnergies to halt new investments in the Adani Group reflects the growing concern surrounding the group’s leadership and ongoing corruption investigations. However, firms like GQG Partners are choosing to retain confidence in Adani’s long-term prospects, citing strong business fundamentals and promising returns.