Shares of Adani Green Energy Limited (AGEL) faced a steep decline on Monday, falling 9.90% to ₹948.20 during the day’s trading. The sharp drop followed TotalEnergies’ announcement to halt further financial contributions to the Adani Group amid allegations of corruption involving key figures within the conglomerate.
TotalEnergies Halts Investments Amid Corruption Allegations
In a statement, TotalEnergies, the French multinational energy giant, declared its decision to withhold further investments in the Adani Group. The company cited the need for clarity on the ongoing corruption accusations as the primary reason for the suspension.
“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,” the statement read. The company also reiterated its stance against unethical practices, adding, “TotalEnergies rejects corruption in any form.”
This decision marks a significant shift in TotalEnergies’ partnership with Adani Green Energy, a collaboration that had been pivotal in expanding India’s renewable energy capacity.
U.S. Indictment Targets Key Adani Figures
The controversy erupted following a U.S. federal indictment, which named eight individuals, including Gautam Adani, Sagar Adani, and former Adani Green Energy CEO Vneet Jaain. The indictment alleges that improper payments were made to Indian officials between July 2021 and 2024 to secure favorable business terms.
Among the accusations, the indictment claims that FBI agents served Sagar Adani with a search warrant and grand jury subpoena in March 2023, more than a year before TotalEnergies invested in the controversial project. This development casts a shadow on past dealings and raises concerns about due diligence in the Adani Group’s international partnerships.
Khavda Solar Park at the Centre of Allegations
The allegations center around the Khavda Solar Park, India’s largest solar project, which has now become embroiled in bribery charges. In September 2024, TotalEnergies invested $444 million for a 50% stake in 1.15 gigawatts of solar installations at the Khavda Solar Park. The project was lauded as a milestone in India’s push toward renewable energy but is now under scrutiny due to the corruption allegations.
The indictment alleges that improper payments were made to expedite approvals and secure favorable terms for the solar park’s development, raising questions about governance and transparency in India’s renewable energy sector.
Market Reaction and Investor Sentiment
The allegations and TotalEnergies’ decision have sent shockwaves through the market. Adani Green Energy shares suffered a 10% decline, reflecting heightened investor concerns over the company’s governance practices and future growth prospects.
This sharp dip in AGEL’s stock price also highlights the vulnerability of the Adani Group’s broader portfolio. TotalEnergies’ statement of non-involvement in corruption and its decision to suspend new investments have added to the growing challenges faced by the Adani Group, already under intense scrutiny from global markets.
Impact on India’s Renewable Energy Push
The allegations and subsequent fallout could have broader implications for India’s renewable energy ambitions. The Khavda Solar Park, a flagship project for the country’s clean energy goals, now finds itself mired in controversy, potentially delaying timelines and deterring international investors.
The suspension of TotalEnergies’ investments may serve as a wake-up call for greater transparency and governance reforms within India’s energy sector. With India targeting ambitious renewable energy milestones, such controversies could derail progress unless stringent measures are implemented to rebuild investor confidence.
Moving Forward
While the Adani Group has not publicly addressed the latest allegations, the company faces mounting pressure to address governance and ethical concerns. Meanwhile, TotalEnergies’ decision to suspend investments could serve as a precedent, prompting other international investors to re-evaluate their partnerships with Indian companies under scrutiny.
For now, the future of the Khavda Solar Park and TotalEnergies’ collaboration with the Adani Group hangs in the balance, as the industry awaits clarity on the accusations and their potential ramifications for India’s renewable energy landscape.