Energy company TotalEnergies on Monday announced the disinvestment in Adani Group in India. The French company made this announcement in the wake of allegations of involvement in a bribery scandal in power projects in India.
The move by Total is seen as the first major impact of the case against Adani in US courts.
US prosecutors have charged Adani Group billionaire chairman Gautam Adani and seven others with paying nearly $26.5 million in bribes to Indian government officials.
Analysts believe that Total Energy's business relationship with Adani Group could be worth 4 billion to 500 crores. Total says it had no prior knowledge of Adani's alleged corruption probe.
It is not yet clear whether TotalEnergies will invest in Adani Group in the future. However, the announcement of the investment moratorium is seen as a major blow to the $143 billion market cap Adani Group. It is believed that such a decision may come from the side of other investors.
Total Energies said that until the allegations leveled against the Adani Group and its implications are clarified, TotalEnergies will not make any new investments in Adani Group companies.
Total Energies owns 20 percent of Adani Green Energy Limited. They also have one vote on the company's board of directors. However, Total has claimed that it was not aware of the investigation and that it is against any form of corruption.
One of the bribery charges brought by US prosecutors is that Adani bribed government officials to secure a power deal that could bring in $200 million in profits over nearly 20 years. 2023 has also been accused of misleading the public despite being aware of the US investigation.
Meanwhile, the share price of Adani Green Energy fell by more than 11 percent on Monday after Total Energy's statement. The day ended 7.9 percent lower. On the other hand, the share of Adani-Total Gas decreased by 1.4 percent. Total's share in this company is 37.4 percent.
Adani's bribery-corruption has also spread tension in the Indian Parliament. A ruckus broke out on Monday when lawmakers demanded a discussion on the allegations against Adani, after which the session was adjourned.
India's opposition parties have in the past accused the Modi government of being a protector of Gautam Adani and his businesses. Regarding the case in the US, Narendra Modi's party, the BJP, said it was the Adani Group's responsibility to deal with the matter. Law will run at its own pace.
Last Sunday, a US development agency Adani Group supported a Sri Lankan port development loan agreement review. The port has over $550 million in loan agreements. However, the loan amount has not yet been discharged.
Adani Group's projects and businesses are globally spread. After the case in the US, some projects came into discussion.
Last week, Kenyan President William Ruto canceled a procurement process. Under this, Adani Group was given the responsibility of managing the main airport of the country.
Bangladesh has also set up a panel to review power contracts. In this, the fate of the contracts made with Adani Power during the Sheikh Hasina government has become uncertain.
