Posted at 5:00 a.m.
After the Celsius saga, another investment from the Caisse de depot et placement du Québec is in trouble. This time, it is a major stock market investment of the Caisse that is affected.
The action of Azure Power Global lost 44% of its value Monday on the New York Stock Exchange after the surprise departure of the CEO who had only been in office for two months. The resigning CEO of the Indian renewable energy producer attributed his departure to “unforeseen circumstances” and causes beyond his control.
Azure also announced on Monday that it received a complaint from a whistleblower in May surrounding potential irregularities and misconduct by certain employees.
As part of the review of these allegations, Azure says it has discovered violations of security and quality standards, and has implemented mechanisms to remedy the situation and strengthen its protocols.
Azure also says it has discovered evidence of manipulation of data and information by employees.
La Caisse is the majority shareholder of Azure Power Global after having increased its investment in the company this year by adding 10 million shares in the first quarter. She thus increased her share to 53%.
The value of the Caisse’s stake in Azure was approximately C$1 billion earlier this year. The decline in the stock in recent months and the steep drop recorded on Monday bring the value of the Caisse’s stake to less than CAN 300 million.
A delay in the publication of financial documents caused Moody’s last week to place Azure under observation for a downward revision.
Azure Power Global had mentioned, a few weeks ago, a revision of its internal control and compliance system to justify a delay in the publication of its financial statements. The company said on Monday that it is still unable to indicate when it will be able to publish them.
Moody’s maintains that its review will take into account the progress and conclusions of Azure’s review process, as well as the impact of any reassessment of financial measures. Moody’s specifies that the Caisse’s commitment will also play a role in its assessment because of the stake held by the Quebec institutional investor. The agency says it expects the Caisse to support Azure if necessary in accordance with the height of its participation.
The Ontario Municipal Employees Retirement System (OMERS) is Azure’s second largest shareholder, after the Caisse. Together, the two entities hold nearly 75% of the company’s shares. They each have a representative on the board of directors.
Caisse spokeswoman Kate Monfette says the organization has a “strong long-term” belief in the renewable energy sector, which “plays a vital role in addressing the climate challenge”.
“As a shareholder, we expect our portfolio companies to maintain the highest standards of governance and compliance and to deal quickly and effectively with any questions or issues that may arise in this regard” , she simply adds.
“Having a seat on the board, the Caisse has been aware that there have been problems for more than a year,” comments François Dauphin, CEO of the Institute on Governance.
Not the first warning
Because this is not the first time that the audit committee of Azure has received warnings.
“Azure’s 2021 annual report shows that there were also reports of whistleblowers last year, but it seems that these warnings were unfounded,” said François Dauphin.
This expert notes that several governance changes have been made in recent months. In addition to changes among administrators, the whistleblower policy was modified last spring, notes François Dauphin.
This means that substantive work seems to have been done in terms of governance and risk management. This is work that must have been started more than a year ago.
Francois Dauphin
OMERS tells The Press do not have a statement to make and directs us to the releases published by Azure.
Azure is the type of investment that aligns with la Caisse’s climate strategy objectives, including holding $54 billion in green assets by 2025 to actively contribute to a more sustainable economy.
When la Caisse became the majority shareholder of Azure two years ago, the Indian company said that by having a majority shareholder with a long-term approach and a AAA credit rating, it would have better access to capital. to further promote its future growth.
After starting the year at US$18 in New York, Azure’s stock closed at US$5.85 on Monday. The stock had passed the US$50 mark in January last year.
Founded 14 years ago, Azure Power Global jumped to the New York Stock Exchange in 2016. The company is developing a solar energy platform in India.