Adani row: France's TotalEnergies puts hydrogen partnership with Adani Group on hold

Frances TotalEnergies has put on hold a planned investment in Adani Groups USD 50 billion hydrogen project pending results of an audit launched following allegations by a US shortseller chief executive Patrick Pouyanneacute said on WednesdayWhile the partnership where the French oil giant was to take a 25 per cent stake in the hydrogen venture of the Adani group was announced in June last year TotalEnergies has not yet signed a contract he said at an earnings callObviously the hydrogen project will be put on hold until we have clarity from Adani group on the allegation levelled by US shortseller Hindenburg Research Pouyanne saidTotalEnergies is one of the biggest foreign investors in billionaire Gautam Adanis business empire and had previously taken stakes in the groups renewable energy venture Adani Green Energy Ltd and city gas unit Adani Total Gas LtdAs per the June 2022 announcement TotalEnergies was to take 25 per cent equity in Adani New Industries Ltd ANIL the Adani Group firm that is investing USD 50 billion over 10 years in a green hydrogen ecosystem that includes an initial production capacity of 1 million tonnes before 2030 The announcement by Total adds to the woes of Adani The crisis around the group following the Hindenburg report has also been used by the opposition parties to attack the government alleging that the tycoons rise was primarily because of his association with Prime Minister Narendra Modi The government has rejected the allegationThis project was announced but nothing has been signed and for now it wont be signed Pouyanne said It makes no sense to add more projects until there is clarity Adani has to explain the allegations he saidHindenburgs allegations of accounting and financial fraud unleashed an over USD 100 billion rout across Adanis companies Adani group has vehemently denied the allegations calling them malicious and an attack on IndiaIt was announced nothing was signed It doesnt exist Pouyanne said on the hydrogen venture Adani has other things to deal with now its just good sense to pause things while the audit goes forward He said Total has USD 31 billion investment and the firm was happy with those investments as both Adani Green and Adani Total Gas are performing well These companies have assets and revenue and are healthy he saidAlso read Weve no personal issues with Adani or Ambani but Rahul struck right chord says Adhir Ranjan ChowdhuryThe French company conducted due diligence before and after investing in the Adani companies he said Shares of Adani Green and Adani Total Gas are still up by a factor of two and eight respectively since Total invested in them Pouyanne addedTotal Frances largest oil and gas company first joined hands with Adani in 2018 for a liquefied natural gas LNG venture before buying a 1975 per cent stake in Adani Green Energy Ltd and a stake in solar assets for USD 25 billion in 202021 It also took a 374 per cent stake in Adani Total Gas Ltd the firm that retails CNG to automobiles and piped natural gas to household kitchens and industriesLast week the firm said its investments in Adani group companies were in full compliance with the law TotalEnergies investments in Adanis entities were undertaken in full compliance with applicable namely Indian laws and with TotalEnergies own internal governance processes it had said in a statement on FridayIt added that it welcomes the announcement by Adani to mandate one of the big four accounting firms to carry out a general auditTotalEnergies exposure resulting from these stakes is limited as it represents 24 per cent USD 31 billion as of December 31 2022 of the companys capital employed and only USD 180 million of net operating income in 2022 the firm had said on Friday These investments being accounted for under the equity method TotalEnergies has not performed any reevaluation in its accounts of its stakes in the listed entities ATGL and AGEL in relation to the increase in their stock values the statement added