French petroleum giant Total Energies has announced that it will not make any new financial contributions to its investments in Adani Group companies. This decision follows a US federal indictment against Adani Group Chairman Gautam Adani, his nephew, and six other key business associates. They are accused of alleged corruption involving over Rs 2,000 crore related to winning solar contracts in certain Indian states, while failing to disclose an ongoing US investigation (since March 2023) to American investors and regulators when raising funds in the US debt market.
"Until the accusations against the Adani Group individuals and their consequences have been clarified, we will not make any new financial contributions as part of our investments in the Adani Group," Total Energies stated in a press release issued Monday from Paris.
At the same time, the French oil major rejected any suggestion of corruption in its dealings with the Adani Group, emphasising that its association remained transparent.
Total Energies first acquired a minority stake in Adani Green Energy in January 2021, owning 19.75 percent. The company also holds a 37.4 percent stake in Adani Total Gas and a 50 percent stake in three renewable joint ventures with Adani Green Energy. Total Energies has made multiple investments in Adani Green Energy, including several joint ventures since September 2023, when it invested $300 million, securing direct ownership of 1.05 GW of wind and solar farms in India.
In 2024, it invested an additional $444 million in a 50:50 joint venture with Adani Green Energy, which has a portfolio of 1,150 MW of solar assets. Other 50:50 joint ventures between the two companies include Adani Green Energy TwentyThree and Adani Renewable Energy Nine.
Total Energies’ partnership with the Adani Group dates back to 2018 when they collaborated on a liquefied natural gas project. In 2020, Total Energies acquired a 50 percent stake in Adani Gas, which was subsequently renamed Adani Total Gas.
The French company further stated: "Total Energies, which is not targeted nor involved in the actions described in the US indictment, will take all relevant actions to protect its interests as a minority (19.75 percent) shareholder in Adani Green Energy and as a 50 percent joint venture partner in projects with Adani Green Energy."
"Total Energies emphasises that its investments in Adani entities were made in full compliance with applicable laws, following its internal governance processes, due diligence, and representations made by the sellers. In particular, Total Energies was not made aware of any investigation into the alleged corruption scheme," the statement continued.
Meanwhile, private equity firm GQG Partners, which had benefitted from the stock rebound following the New York-based short seller’s allegations in January 2023 (which included claims of stock manipulation and round-tripping), reaffirmed its support for the Adani Group. However, it cautioned that it would "remain diligent in re-underwriting their positions and examining any new facts."
In a memo to investors, GQG Partners stated that as of November 29 (the date of the US indictment), its total exposure to the Adani Group stood at $9.7 billion, or 6.1 percent of its $158.6 billion asset base. On November 21, after Adani Group shares fell as much as 23 percent, GQG’s exposure had reduced to $8.1 billion, or 5.2 percent of its $156.7 billion assets.
“Given this, we do not see these actions as having any material impact on Adani businesses, except for Adani Green, and believe that this level of exposure is manageable, even in light of the volatility in Adani Group stocks,” GQG stated. The firm also mentioned that it did not anticipate Adani companies needing to raise additional capital "at this point."
On the stock market, shares of Adani Total Gas closed at Rs 6,000.75, a 1.43 percent increase after a sharp decline last week. Meanwhile, Adani Green Energy saw a decline of over 8 percent, closing at Rs 967.65 on the BSE, despite the benchmark index rallying over 1.25 percent.