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Who is India’s Adani and why is his company tanking?

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Who is India's Adani and why is his company tanking?

The business empire of Gautam Adani has shed tens of billions of dollars in value on the back of a report alleging accounting fraud that the Indian tycoon’s firm has strenuously rejected.

Who is Gautam Adani?

Adani, 60, is a publicity-shy school dropout of humble origins who rose to become the world’s third-richest man with a fortune — until last week — of around $130 billion.

Moving to Mumbai in his teens to work sorting diamonds, he formed his own import-export business. His big break came in 1995 when he acquired a shipping port just as India’s economy was opening up.

What does his empire do?

Today Adani Group does everything from power generation and coal mining to cement, media and food. Its seven listed units had a market value in January of around $220 billion.

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Critics say Adani’s closeness to Prime Minister Narendra Modi, a fellow native of Gujarat state, has brought his group an unfair advantage in winning business.

On the back of eye-watering rises in the share prices of his firms, Adani became Asia’s richest man. Globally only Elon Musk and Bernard Arnault and family were wealthier, according to Forbes.

What has been alleged?

On January 24, Hindenburg Research — an activist US investment group that bets on stocks falling — accused Adani Group of committing “a brazen stock manipulation and accounting fraud scheme over the course of decades”.

Hindenburg’s two-year investigation also found that elder brother Vinod Adani, “through several close associates, manages a vast labyrinth of offshore shell entities”.

“We believe the Adani Group has been able to operate a large, flagrant fraud in broad daylight in large part because investors, journalists, citizens and even politicians have been afraid to speak out for fear of reprisal,” it said.

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What has been the result?

The report has sparked a huge sell-off in shares in Adani’s firms, wiping out more than $68 billion in market value, according to Bloomberg News. Trading in some stocks was temporarily halted.

Adani’s personal wealth has dived by around $40 billion and he has tumbled down the real-time Forbes rich list to number eight.

The timing was also terrible, coming just as Adani Group is seeking to raise $2.5 billion to strengthen its finances with a sale of shares that is due to expire on Tuesday.

How has Adani reacted?

On January 25, Adani´s finance chief called the Hindenburg report a “malicious combination of selective misinformation and stale, baseless and discredited allegations that have been tested and rejected by India´s highest courts”.

On Sunday the firm issued a 413-page statement that it said rebutted all of Hindenburg’s claims, calling the group the “Madoffs of Manhattan” — a reference to crooked financier Bernie Madoff.

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“This is not merely an unwarranted attack on any specific company but a calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India,” it said.

Did this reassure investors?

Some of Adani´s firms inched back upwards on Monday, but on the whole, investors continued to dump Adani stock, wiping off billions more in market value.
Hindenburg said that only about 30 pages of the Adani statement focused on issues related to its report.

“The remainder of the response consisted of 330 pages of court records, along with 53 pages of high-level financials, general information, and details on irrelevant corporate initiatives, such as how it encourages female entrepreneurship and the production of safe vegetables,” it said.

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White-led DA party joins ANC in South African unity government

White-led DA party joins ANC in South African unity government

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White-led DA party joins ANC in South African unity government

 The African National Congress and its largest rival, the white-led, pro-business Democratic Alliance, agreed on Friday to work together in South Africa’s new government of national unity, a step change after 30 years of ANC majority rule.

Once unthinkable, the deal between two sharply antagonistic parties is the most momentous political shift in South Africa since Nelson Mandela led the ANC to victory in the 1994 elections that marked the end of apartheid.

“Today, South Africa is a better country than it was yesterday. For the first time since 1994, we’ve embarked on a peaceful and democratic transfer of power to a new government that will be different from the previous one,” DA leader John Steenhuisen said in a televised address.

“From today, the DA will co-govern the Republic of South Africa in a spirit of unity and collaboration,” he said, adding that multi-party government was the “new normal”.

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The ANC lost its majority for the first time in an election on May 29 and has spent two weeks locked in intensive behind-the-scenes talks with other parties, which came down to the wire on Friday morning as the new parliament was convening.

The DA’s entry into national government is a big moment for a country still processing the legacy of the racist colonial and apartheid regimes. The party has struggled to shake off its image as a defender of rich white people and convince a broad spectrum of South Africans that it reflects their aspirations.

Two smaller parties, the socially conservative Inkatha Freedom Party and the right-wing Patriotic Alliance, will also take part in the unity government, they said. 

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Hamas’ armed wing says Israeli airstrike killed two hostages in Rafah

Hamas’ armed wing says Israeli airstrike killed two hostages in Rafah

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Hamas' armed wing says Israeli airstrike killed two hostages in Rafah

Hamas’ armed wing al-Qassam Brigades said on Friday that two Israeli hostages held in Gaza were killed in an Israeli airstrike on Rafah a few days ago.

The group, in a video posted on its Telegram channel, did not release the names of those said to have been killed or provide any evidence.

The Israeli government “does not want your hostages to return, except in coffins,” the al-Qassam Brigades statement said.

Israel rescued four hostages held by Hamas in a hostage-freeing operation in central Gaza’s al-Nuseirat on June 8. The health ministry in Hamas-run Gaza said more than 250 Palestinians were killed in the raid.

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The war in Gaza erupted when Hamas militants stormed southern Israel on Oct. 7, killing around 1,200 people and seizing more than 250 hostages, according to Israeli tallies. 

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US attack sub, Canada navy patrol ship arrive in Cuba on heels of Russian warships

US attack sub, Canada navy patrol ship arrive in Cuba on heels of Russian warships

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US attack sub, Canada navy patrol ship arrive in Cuba on heels of Russian warships

A Canadian navy patrol ship sailed into Havana early on Friday, just hours after the United States announced a fast-attack submarine had docked at its Guantanamo naval base on Cuba, both vessels on the heels of Russian warships that arrived on the island earlier this week.

The confluence of Russian, Canadian and U.S. vessels in Cuba – a Communist-ruled island nation just 160 km (100 miles) from Florida – served up a reminder of old Cold War tensions and of current fraught ties between Russia and Western nations over the Ukraine war.

However, both the U.S. and Cuba have said the Russian warships pose no threat to the region. Russia has also characterized the arrival of its warships in allied Cuba as routine.

The Admiral Gorshkov frigate and the nuclear-powered submarine Kazan, half submerged with its crew on deck, sailed into Havana harbor on Wednesday after conducting “high-precision missile weapons” training in the Atlantic Ocean.

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Canada`s Margaret Brooke patrol vessel began maneuvers early on Friday to enter Havana harbor, part of what the Canadian Joint Operations Command called “a port visit…in recognition of the long-standing bilateral relationship between Canada and Cuba.”

A Canadian diplomat characterized the Margaret Brooke`s arrival as “routine and part of long-standing cooperation between our two countries”, adding it was “unrelated to the presence of the Russian ships.”

Russia and Cuba were close allies under the former Soviet Union and tensions with Washington over Communism in its “backyard” peaked with the Cuban Missile Crisis of 1962. Moscow, which has maintained ties with Havana, has questioned the apparent nervousness of the West over the warships this week. 

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