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TotalEnergies says exposure to Adani stands at $3.1bn as turmoil mounts

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TotalEnergies, one of the largest foreign investors in Adani, has said it had carried out due diligence “consistent with best practices” when investing $3.1bn in the Indian group targeted by fraud allegations that have triggered a $100bn stock rout.

The figure did not include its $4bn investment in a green hydrogen venture with Adani announced last year, through which it will buy a 25 per cent stake in Adani New Industries Limited (ANIL).

That deal had not yet closed by the end of 2022.

“TotalEnergies’ investments in Adani’s entities were undertaken in full compliance with applicable — namely Indian — laws, and with TotalEnergies’ own internal governance processes,” said Total.

It added that it “welcomes the announcement by Adani to mandate one of the ‘big four’ accounting firms to carry out a general audit”.

Total’s defence comes after short seller Hindenburg Research alleged last week that Adani Group had engaged in stock manipulation and accounting fraud, and said it had taken positions betting against the group.

The report led to a sell-off in Adani shares, which forced the conglomerate to call off a $2.4bn share sale.

Hindenburg’s claims have become a leading attack line for opposition parties in India, who allege that tycoon Gautam Adani’s rise was helped by close ties to Prime Minister Narendra Modi’s government, something both sides deny.

India’s parliament adjourned on Friday for the second time after the Congress party demanded a probe into the share rout.

The party has also called for nationwide protests against Adani on Monday.

S&P Dow Jones Indices on Thursday evening removed the conglomerate’s flagship Adani Enterprises from its sustainability index following what it described as a “media and stakeholder analysis triggered by allegations of stock manipulation and accounting fraud”.

Adani has responded furiously to Hindenburg’s allegations, calling them malicious, discredited and an “attack on India”.

Shares in Adani Enterprises fell 15 per cent before recovering on Friday, after dropping sharply following the cancellation of the share sale on Wednesday night.

Adani said it acted after the sell-off left the value of shares far lower than the price at which they were offered to investors. Mohit Ralhan, chief executive of TIW Capital, an asset management company, said Hindenburg’s report “threatens to undermine investor confidence in India more broadly, and in the nation’s regulatory framework”.

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