Following the significant charges made against Adani by the US-based short seller Hindenburg Research, TotalEnergies issued a detailed statement claiming that its investments in Adani’s enterprises were made in full accordance with all applicable laws, specifically Indian legislation, and with TotalEnergies’ own internal governance systems.
According to a statement released by its partner TotalEnergies on Friday, Adani Group will select one of the “big four” accounting companies to conduct a general audit. Adani Total, Adani Total Gas, and Adani Green Energy Limited are among the group firms in which TotalEnergies, a company with its headquarters in France, holds stakes of 50%, 37.4%, and 19.75%, respectively.
The France-based energy company added that the due diligence, which was completed to TotalEnergies’ satisfaction, followed best practices and that all pertinent information in the public domain, including the thorough disclosures to authorities required by applicable legislation, was evaluated. The statement stated that “TotalEnergies welcomes the announcement by Adani to mandate one of the “big four” accounting firms to carry out a general audit.”
TotalEnergies claimed that the exposure caused by these stakes is minimal
The Adani Group has been charged with stock manipulation and fraud by the Hindenburg report, which was released on January 24. The accusations shook the group as its stocks fell by about 60%, making investors panic over how the company and the auditors were operating. According to its annual report, Adani Group hired Ahmedabad-based Shah Dhandharia & Co. to audit its 2021–2022 finances. In its assessment, Hindenburg voiced significant concerns about Dhandharia, noting that it hardly seemed competent in handling difficult audit jobs.
“The audit partners at Shah Dhandharia who respectively signed off on Adani Enterprises and Adani Total Gas’ annual audits were as young as 24 and 23 years old when they began approving the audits. They were essentially fresh out of school, hardly in a position to scrutinize and hold to account the financials of some of the largest companies in the country,” the report said.
TotalEnergies said in its statement that the exposure caused by these stakes is minimal because it only accounts for 2.4 per cent of the capital utilised by the company and $180 million in net operating income in that same year. According to the statement, “These investments being accounted for under the equity method, TotalEnergies has not performed any re-evaluation in its accounts of its stakes in the listed entities ATGL (Adani Total Gas Ltd) and AGEL (Adani Green Energy) concerning the increase in their stock values.
