Investment struggling in India | The CDPQ is cleaning up at Azure Power Global

A clean sweep was given by the Caisse de depot et placement du Québec (CDPQ) to Azure Power Global, an Indian solar energy producer in which the institution injected around 600 million CAN. The mystery still hangs over the extent of the irregularities that have shaken the company since the summer.

Specifically, the company will have a new chief executive – Sunil Gupta – as of July 10, while a new chief financial officer is already in place. This is Sugata Sircar, recruited last fall as a director and member of the audit committee. Both of these managers are described by Azure as veterans in their respective industries.

“When we change the president and the chief financial officer on the same day, it means that a wind of change is blowing,” underlines the director of the Institute for the governance of public and private organizations (IGOPP), François Dauphin . A director who returns to management, we see this less often in large companies. »

The woolen stocking of Quebecers is the main shareholder (53%) of Azure, in turmoil since last August due to allegations raised by a whistleblower and the surprise departure of its big boss, who was not in post for only two months. The audited results – scrutinized by an independent auditor – expected since the summer, remain unknown.

Earlier this year, we discovered new skeletons in the closet. Three other projects – out of the 23 in service – were affected by irregularities.

The results of the internal investigation are still awaited. This was accompanied by a warning that the company might experience difficulty in meeting its financial obligations.

Since last August, Azure’s stock – which was trading above US$48 in the winter of 2021 – has crashed on the New York Stock Exchange. Despite the changes announced on Monday, the stock retreated 5.5%, or 11 cents US, to close at $1.88. This gives a value of 64 million US (87 million CAN) to the 34.25 million shares held by the Fund.

At the Quebec government’s annual credit study on Monday, the president and CEO of the CDPQ, Charles Emond, had rather referred to a “book value […] around 400 million.

On the siding

The game of musical chairs announced on Tuesday sends Pawan Kumar Agrawal, who had been chief financial officer for more than four years, to the sidelines. He is relegated to a subsidiary of the company, but keeps a job. Money laundering charges have been filed against this manager due to his past role in a financial scandal¹.

Mr. Agrawal had been pinned along with around 20 other individuals in October 2021 for his alleged participation in a money laundering scheme between 2017 and 2019 while at Yes Bank. The charges have not yet been proven in court.

Profits despite the turmoil

In front of the parliamentarians, where he reported on the management of his organization, the big boss of the Caisse once again came to the defense of Azure. When questioned, Mr. Emond replied that you have to look beyond the share price.

“It’s not an investment for which we will necessarily have a loss,” he said. The story is far from over. It is a business that makes profits. For us, it is an investment that is not necessarily perfectly represented by the stock market price. »

Verification made, Azure posted losses in 2020 and 2021, according to its financial statements consulted by The Press. With respect to last year, however, a profit of 9 million US has been generated, according to an unaudited preliminary financial report released last January. This data must receive the stamp of approval from an external auditor.

According to Mr. Emond, Azure’s financial picture for fiscal year 2022 should be presented in the “coming weeks”. The company must do so by mid-July to avoid being delisted on Wall Street.

With the collaboration of André Dubuc, The Press