TotalEnergies halts Adani investment; GQG bets on Indian government support amid US bribery charges

MUMBAI & BENGALURU: France’s TotalEnergies SE, which owns less than a fifth of Adani Green Energy Ltd, has decided not to invest more in Adani Green Energy Ltd after its top executives were indicted in a $250 million bribery case. Companies invest more money. Another major investor, Florida-based GQG Partners, is cautiously optimistic that it expects the Indian government to support Adani Group.

Rajiv Jain-led GQG Partners said in a letter to investors that it will continue to support Adani Group and that the US prosecutor’s investigation will not have a significant impact on the port retail group’s companies . However, the GQG expects the investigation to be protracted, harming Adani Group’s ability to borrow foreign capital.

“As investors in numerous companies around the world, we take any prosecution very seriously. Nonetheless, we recognize the difference between individual accusations and corporate accusations,” GQG Partners said in a Nov. 21 note to investors. Mint Reviewed. “We believe the fundamentals of the companies we invest in remain sound.”

GQG Partners and Rajiv Jain did not immediately respond. Mint Request for comment.

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In January 2023, the American short-seller Hindenburg Research accused the Adani Group of free-falling shares, and the American investor emerged as a white knight. As of November 21, GQG Partners had invested in seven Adani Group-listed companies, with a total exposure of $8.1 billion.

Shares in GQG Partners plummeted on the ASX on November 20 following the indictment of Adani Green executives, including group founder and chairman Gautam Adani 20%. GQG shares have since recouped some of their losses.

Adani Group, which has denied the accusations by U.S. prosecutors and Hindenburg, assured investors on Monday it had enough cash reserves to repay debt and realize its growth plans.

The U.S. Department of Justice and the U.S. Securities and Exchange Commission have charged Gautam Adani, Adani Green Energy executive director Sagar Adani and the company’s managing director Vineet Jain with allegedly bribing Indian government officials in exchange for favorable solar power Power Supply Agreement.

The charges include withholding information from U.S. investors while raising two bonds and two syndicated loans that are subject to an investigation by U.S. federal prosecutors.

As for TotalEnergies, the company has a 50% stake in three joint ventures with Adani Green Energy. The French energy giant also holds a 37.4% stake in Adani Total Gas Ltd.

The French energy company said in a statement on Monday that it “will not make any new financial contributions as part of its investment in Adani Group companies until the allegations against individuals in the Adani Group and their consequences are clarified” “.

In September, Adani Green Energy announced an equal joint venture with TotalEnergies to build a solar project portfolio totaling 1,150 MW at its renewable energy facility in Khavda, Gujarat. TotalEnergies said in a media statement that it would inject $444 million “to accelerate the development of these projects.”

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new delhi support

GQG played down the impact the allegations could have on Adani Group. While the allegations are serious, the report states that many other companies have faced similar U.S. government actions, including Walmart, Oracle, Siemens, Pfizer, Toyota and Airbus. Such investigations can take years to resolve and could result in reduced penalties or fines, the report said.

Additionally, GQG expects New Delhi to support Adani.

“We believe the Indian government will continue to support Gautam Adani as he is India’s most important infrastructure developer,” the report said.

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The US investor believes Indian regulators are unlikely to investigate the Adani Group given that it has already undergone a “thorough review” following the Hindenburg crisis. However, GQG said any action by New Delhi would have a significant impact on the group’s shares.

While the GQG said the Adani Group may not be able to access foreign capital as a result of the indictment, it added that other than Adani Green Energy, no other Adani Group company currently needs to raise additional funds.

GQG told investors: “Based on the current facts, we believe these companies will continue to operate even if individuals are fined or sanctioned.”

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