Total Energies freezes investment in Adani Group over bribery charges | Corruption News

French oil company TotalEnergies has halted investment in Adani Group after the Indian port-to-power conglomerate ran into trouble over a multimillion-dollar bribery scheme.

The move, announced on Monday, is the first major fallout from a decision by US authorities to charge Adani’s billionaire chairman and founder Gautam Adani – one of the world’s richest men – and seven other people for agreeing to pay an estimated $265m in bribes to the Indian government. officials.

TotalEnergies, whose financial exposure to Adani companies is estimated at between $4bn and $5bn by analysts at Bernstein Research, said it had not been informed of the investigation into the alleged corruption scheme.

Although TotalEnergies’ plans for future investments in Adani Group firms were unknown, the announcement of the temporary suspension adds to the criticism of the $143bn Indian conglomerate over disclosure standards, which could lead to scrutiny from other investors.

“Until that time when the Adani group’s lawsuits have been clarified and their results, TotalEnergies will not make a new financial contribution as part of the investment in the Adani group of companies,” the French company said.

TotalEnergies, which has a 20 percent stake and a seat on the board of the company at the center of the case, Adani Green Energy Ltd, has said it rejects corruption in any form.

The bribery charges by US prosecutors relate to alleged payments to secure contracts that could bring in profits of $2bn over 20 years. These charges also include making misleading statements to the public despite being informed of the US investigation in 2023.

Adani Group said the allegations and those leveled by the US Securities and Exchange Commission in a similar civil case are baseless and will seek “all legal remedies”.

Adani did not immediately respond to a request for comment on TotalEnergies’ statement.

Cancel contracts

Most of the alleged bribes – $228m – were paid to a government official to get electricity distribution companies in Andhra Pradesh state to agree to buy electricity, the US indictment said. Adani said the allegations are baseless.

Andhra Pradesh’s government is “reviewing all internal files” on the previous administration, which allegedly took place under it, the state’s finance minister, Payyavula Keshav, told Reuters on Monday.

“We will also check what can be done next, like, is there any chance of canceling the contract?… The state government is looking into this issue,” said Keshav.

Andhra Pradesh’s previous ruling party, the YSR Congress Party, last week denied wrongdoing.

The US indictment said that after the payment of alleged bribes to Indian officials, Andhra Pradesh’s electricity distribution companies entered into a power supply agreement to purchase “approximately seven gigawatts of solar power – the largest amount of any Indian state or region”.

Shares in Adani Green Energy fell more than 11 percent on Monday after the TotalEnergies statement before recovering to close up 7.9 percent, while Adani Total Gas, in which the French company owns 37.4 percent, ended down 1.4 percent.

The Indian parliament was adjourned on Monday after the disruption of the whites who wanted to discuss these allegations.

Earth impact

Adani Group’s projects and businesses are located around the world and some have come under scrutiny since the US indictment.

On Sunday, the US development agency said it was reviewing the impact of bribery allegations on its deal to lend more than $550m to Sri Lanka’s Adani Group-backed port development industry.

The institution said that no funds have been released under the loan obligation.

Last week, Kenyan President William Ruto canceled a proposed acquisition that would have given Adani control of the country’s main airport.

In Bangladesh, a panel investigating power generation contracts, including one with Adani Power, has called on the interim government to hire a global law firm to ensure thorough and transparent investigations into past deals.

In India, opposition parties, which have consistently targeted Adani for what they say is its closeness to Prime Minister Narendra Modi, disrupted both houses of parliament demanding a discussion on Adani’s allegations.

“The first step the government should take is to have a detailed discussion on the Adani saga that may tarnish India’s image globally,” Mallikarjun Kharge, president of the opposition Congress, wrote in X.

India’s opposition has previously accused the Modi government of protecting Gautam Adani and his businesses, which both deny.

Modi’s opponents say he has a long relationship with Adani, going back nearly two decades when Modi was chief minister of the western state of Gujarat, where Adani originated.

They accused the government of favoring the group in business deals, and the charges the government dismissed as “absurd allegations”.

The government has not commented on the case but Modi’s Bharatiya Janata Party (BJP) has said the Adani Group must face it and defend itself and that the law will take its place.