Adani Bribery Fallout: Cancellations and Dropped Investments

NEW DELHI (Reuters) – French oil giant TotalEnergies has suspended further investments in the Adani Group following U.S. bribery charges against the Indian conglomerate’s billionaire founder, Gautam Adani. The decision, announced on November 25, comes as part of the fallout from an investigation in which U.S. authorities accuse Adani and seven others of paying $265 million in bribes to Indian government officials. These alleged payments were made to secure solar power-supply contracts in several Indian states, including Andhra Pradesh.

TotalEnergies, which holds a 20% stake in Adani Green Energy Ltd, the company central to the bribery case, has stated that it will pause all financial contributions to Adani Group companies until the accusations are clarified. The company’s financial exposure to Adani is estimated at between $4 billion and $5 billion. In a statement, TotalEnergies emphasized that it rejects corruption in any form and will not invest in Adani firms until the situation is resolved.

The U.S. indictment alleges that $228 million of the bribes were paid to a government official in Andhra Pradesh, aimed at securing an agreement for the state’s electricity distribution companies to purchase approximately seven gigawatts of solar power—an unprecedented amount for any Indian state. TotalEnergies’ move marks a significant escalation in the scrutiny faced by Adani Group, which has seen its shares and bonds plummet following the indictment.

Meanwhile, the Andhra Pradesh state government is actively reviewing internal files related to the alleged bribery, with Finance Minister Payyavula Keshav stating that officials are exploring the possibility of canceling the power supply contract linked to Adani. Keshav confirmed the government was investigating whether any legal action could be taken in light of the alleged misconduct.

The bribery charges have sparked widespread political upheaval in India, with opposition parties calling for a parliamentary discussion on the matter. The Adani Group has faced accusations of being closely linked to Prime Minister Narendra Modi, a claim both the group and Modi have denied. The ongoing crisis has seen parliamentary sessions disrupted by opposition lawmakers demanding a debate on the allegations.

The Adani Group has steadfastly denied the charges, calling them baseless, and has vowed to pursue all legal avenues to contest the U.S. indictment. Despite the company’s denials, the allegations are having far-reaching consequences, with scrutiny increasing globally. In addition to the TotalEnergies investment halt, the U.S. International Development Finance Corporation (DFC) is reviewing its $550 million loan commitment to a Sri Lankan port development project backed by Adani.

Internationally, the crisis has led to significant setbacks for Adani’s global operations. Kenyan President William Ruto recently canceled a procurement process that was set to award control of Kenya’s main airport to Adani, while a committee in Bangladesh has called for a thorough legal review of Adani’s power generation contracts in the country.

As the investigation continues, the Adani Group is under intense scrutiny both in India and abroad, with significant implications for its ongoing projects and future growth.