TotalEnergies Pauses Investing in Adani as US Probes Execs over Bribery

TotalEnergies SE said Monday it will not make any new investment in Adani Group until bribery charges in the United States against some executives of the Indian diversified conglomerate are settled.

Last week the Justice Department in Washington unveiled a five-count criminal indictment against Gautam S. Adani, chair of Adani Group and the group’s renewables arm Adani Green Energy Ltd. (AGEL); Sagar R. Adani, executive director of AGEL; and Vneet S. Jaain, managing director of AGEL. The charges before a Brooklyn, New York court, which also target five other persons, accuse the defendants of orchestrating a scheme to bribe Indian government officials with over $250 million to win supply contracts for a solar project. The individuals are also accused of misleading U.S.-based and international investors to secure billions in financing for renewable energy projects, including the supply contracts associated with the bribery.

“TotalEnergies has learnt through public announcements made by the US authorities of the indictment of certain individual Adani group executives in relation to an alleged corruption scheme linked to the business of Adani Green Energy Limited (AGEL)”, the French energy giant said in a statement online. “This indictment does not target AGEL itself, nor any AGEL-related companies.

“In accordance with its code of conduct, TotalEnergies rejects corruption in any form.

“TotalEnergies, which is not targeted nor involved in the facts described by such indictment, will take all relevant actions to protect its interests as minority (19.75 percent) shareholder of AGEL and as a joint-venture partner (50 percent) in project companies with AGEL.

“Until such time when the accusations against the Adani group individuals and their consequences have been clarified, TotalEnergies will not make any new financial contribution as part of its investments in the Adani group of companies”.

After embarking on their first energy partnership in 2018 with the formation of Adani Total Private Ltd., TotalEnergies and Adani expanded their collaboration into renewables with TotalEnergies acquiring a minority stake in AGEL and a 50 percent stake in AGEL’s solar assets, as jointly announced January 18, 2021.

Last year TotalEnergies and AGEL launched a joint venture (JV) for wind and solar projects. “The JV houses the 1,050 MW portfolio comprising a mix of already operational (300 MW), under construction (500 MW) & under development assets (250 MW) with a blend of both solar & wind power projects in India”, AGEL said in a statement December 27, 2023, announcing the completion of the JV formation process.

“As part of the JV, TotalEnergies invested USD 300 million in AGEL subsidiary, for acquiring 50 percent stake in the projects”, the December statement said

On September 3, 2024, TotalEnergies announced an agreement with AGEL to create another solar JV with a 50-50 ownership, targeting a capacity of 1,150 MW alternating current in Gujarat. “AGEL will contribute to the joint venture with assets and TotalEnergies will provide an equity investment of $444m to support their development”, TotalEnergies said then.

The indictment, dated October 24 but only made public November 20, says, “In or about and between 2020 and 2024, senior executives of an Indian renewable-energy company, which was a portfolio of an Indian conglomerate; an issuer company that operated in the renewable-energy sector whose securities were traded on a United States exchange; and that issuer’s largest shareholder, a Canadian institutional investor, participated in a scheme to bribe Indian government officials to ensure the execution of lucrative solar energy contracts with Indian government entities”.

“During the same period, senior executives of the Indian renewable-energy company conspired to misrepresent the company’s anti-bribery practices to United States-based investors and international financial institutions and concealed from those same investors and institutions their bribery of Indian government officials to obtain billions of dollars in financing for green energy projects, including the corrupt solar energy supply contracts”, adds the court document published on the Justice Department’s website.

“In addition, senior executives of the issuer company and its Canadian institutional investor conspired to obstruct the United States government’s investigations into the bribery scheme”.

Adani Group denied the allegations. “All possible legal recourse will be sought”, it said in a brief online statement last Thursday.

AGEL fell 7.89 percent to INR 968.8 Monday on the National Stock Exchange of India. In Paris, TotalEnergies shed 2.12 percent to EUR 55.88; in New York, it dropped by 2.35 percent to $58.26.

To contact the author, email jov.onsat@rigzone.com