NEW DELHI: France's TotalEnergies SE on Friday said it invested in two Adani Group companies in full compliance with Indian laws and no re-evaluation has been performed following the stock market rout the conglomerate has faced after a report raised governance concerns.
The French company issued a statement in the aftermath of stock prices of Adani Total Gas Ltd and Adani Green Energy Ltd plunging about 60 per cent since January 24.
It said its exposure to Adani Group companies was USD 3.1 billion of capital employed at the end of December, a small fraction of the energy giant's globe-spanning interests.
"TotalEnergies' investments in Adani's entities were undertaken in full compliance with applicable - namely Indian - laws, and with TotalEnergies' own internal governance processes," it said.
Adani Group, which has lost more than USD 100 billion in market value since Hindenburg Research accused it of stock manipulation and accounting fraud in the January 24 report, has partnerships with TotalEnergies in gas and renewable energy.
Adani Group has denied any wrongdoing and has threatened to sue Hindenburg.
"The due diligence, which were carried out to TotalEnergies' satisfaction, were consistent with best practices, and all relevant material in the public domain was reviewed, including the detailed disclosures to regulators required under applicable laws," the statement said.
"TotalEnergies welcomes the announcement by Adani to mandate one of the 'big four' accounting firms to carry out a general audit," it added.
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The French firm owns a 37.4 per cent stake in Adani Total Gas Ltd, which sells CNG to automobiles and piped natural gas to households and industries, and 50 per cent in Adani Total Private Limited, which is developing a liquefied natural gas import terminal.
In 2020, it bought 19.75 per cent in renewables unit Adani Green Energy Ltd and a stake in solar assets for USD 2.5 billion.
"The entities TotalEnergies has invested in with Adani are managed in accordance with applicable regulations. The day-to-day operations of the entities listed in India, Adani Total Gas Limited (ATGL) and Adani Green Energy Limited (AGEL), are managed by independent teams of professional managers, and their boards are composed of at least 50 per cent independent and non-executive directors," the statement said.
TotalEnergies' exposure resulting from these stakes is limited, as it represents 2.4 per cent (USD 3.1 billion as of December 31, 2022) of the company's capital employed and only USD 180 million of net operating income in 2022.
"These investments being accounted for under the equity method, TotalEnergies has not performed any re-evaluation in its accounts of its stakes in the listed entities ATGL and AGEL in relation to the increase in their stock values," the statement added.
TotalEnergies is also partnering Adani in the planned production of green hydrogen.