French company TotalEnergies on Wednesday said that it has put on hold its participation in the Adani Group’s $50 billion (over Rs 4.12 lakh crore) hydrogen project after allegations of financial irregularities were raised against the conglomerate by United States-based firm Hindenburg Research, Reuters reported.

The partnership with Adani Group’s hydrogen venture was announced in June and TotalEnergies was slated to take a 25% stake in the project, according to The Economic Times. TotalEnergies is one of the biggest foreign investors in the Adani Group.

On Wednesday, TotalEnergies Chief Executive Officer Patrick Pouyanne said that the company was waiting for the results of an audit announced by Adani Group in response to the allegations made by Hindenburg Research.

“The deal was announced but nothing was signed,” Pouyanne said, according to Business Today. “Mr [Gautam] Adani has other things to deal with now, it’s just good sense to pause things while the audit goes forward.”

In a report published last month, Hindenburg Research had alleged that Adani Group engaged in stock manipulation and accounting fraud to pull off the “largest con in corporate history”. It claimed that the conglomerate headed by Gautam Adani has amassed substantial debt by pledging overvalued shares.

On its part, the Adani Group has called it “a malicious combination of selective misinformation and stale, baseless and discredited allegations”. The conglomerate has also said that the report was a “calculated attack” on India and its institutions.

On Wednesday, Pouyanne said that TotalEnergies has a $3.1 billion (over Rs 25,603 crore) investment in Adani Green and Adani Total Gas. He said the firm was happy both of the companies were performing well.

“These companies have assets and revenue and are healthy,” he said, according to PTI.

Adani vs Hindenburg

In its report, Hindenburg Research had said that it holds short positions in the Adani Group companies through US-traded bonds and non-Indian-traded derivative instruments. Short positions are “created when a trader sells a security first with the intention of repurchasing it or covering it later at a lower price”, according to Investopedia.

Investment research firms like Hindenburg often engage in “activist short selling”, or publicising information about companies to trigger a fall in their share prices.

On January 29, the Adani Group issued a 413-page response. The conglomerate alleged that the mala fide intention of Hindenburg was apparent as the report was released ahead of a $2.5 billion (over Rs 20,646 crore) share sale by its flagship firm Adani Enterprises.

“It is tremendously concerning that the statements of an entity sitting thousands of miles away, with no credibility or ethics has caused serious and unprecedented adverse impact on our investors,” the Adani Group said.

On January 30, Hindenburg retorted saying Adani Group cannot obfuscate its fraud by nationalism.

“We also believe India’s future is being held back by the Adani Group, which has draped itself in the Indian flag while systematically looting the nation,” Hindenburg Research said. It said that the Adani Group had not given specific answers to 62 of the 88 questions the research firm had posed in its report.

Correction and clarification: This headline has been edited. The previous version suggested that the TotalEnergies deal with Adani was valued at $50 billion. The firm only has a 25% stake in the $50 billion Adani hydrogen project.