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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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US Coast Guard boards Chinese fishing boats near Kiribati, official says

US Coast Guard boards Chinese fishing boats near Kiribati, official says

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US Coast Guard boards Chinese fishing boats near Kiribati, official says

The US Coast Guard and Kiribati police boarded two Chinese fishing boats during a patrol against illegal fishing in the Pacific Islands nation’s vast exclusive economic zone this month but found no issues aboard, a coast guard official said.

The United States is seeking a bigger role for its coast guard in helping remote Pacific Islands nations monitor millions of kilometres of ocean – a rich tuna fishing ground – a move that also boosts surveillance as a rivalry with China over security ties in the region intensifies.

Reuters reported on Friday that Chinese police are working in Kiribati, with uniformed officers involved in community policing and a crime database program.

Kiribati, a nation of 115,000 residents, is considered strategic despite being small, as it is relatively close to Hawaii and controls a 3.5 million square kilometre (1.35 million square mile) exclusive economic zone. It is also host to a Japanese satellite tracking station.

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Washington has flagged plans to build an embassy in Kiribati to compete with China, but has not yet done so.

Kiribati police officers were on patrol with the US Coast Guard as “ship riders” for the first time in almost a decade, between Feb. 11-16, a US Coast Guard Guam spokeswoman said.

“The two People’s Republic of China (PRC) flagged fishing vessels were boarded as part of routine maritime law enforcement activities to ensure compliance with regulations within the Kiribati Exclusive Economic Zone,” the spokeswoman said in an emailed comments.

No concerns were reported during the boardings, she said.

“Both Kiribati officers from the Kiribati Police Maritime Unit and US Coast Guard officers were involved in the boarding operations. This collaboration underscores the partnership between the two nations in upholding maritime law and good governance,” she added.

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The Kiribati president’s office and Chinese embassy did not respond to a Reuters request for comment.

Kiribati’s acting police commissioner, Eeri Aritiera, told Reuters last week that Chinese police on the island work with local police.

China built a large embassy on the main island, Tarawa, after Kiribati switched ties from Taiwan to Beijing in 2019. 

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Ukraine downs nine Russian drones, three missiles, air force says

Ukraine downs nine Russian drones, three missiles, air force says

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Ukraine downs nine Russian drones, three missiles, air force says

Russia launched 14 attack drones and a barrage of missiles at Ukraine overnight, with air defence systems destroying nine drones as well as three guided missiles over the Kharkiv and Dnipropetrovsk regions, Ukraine’s air force said on Monday.

Russia also launched two S-300 missiles from anti-aircraft missile systems and one air-to-surface Kh-31P missile, the air force said on the Telegram messaging app.

It was not clear what happened to the missiles and drones that were not downed. 

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Taiwan ally Tuvalu names Feleti Teo as new prime minister

Taiwan ally Tuvalu names Feleti Teo as new prime minister

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Taiwan ally Tuvalu names Feleti Teo as new prime minister

Tuvalu on Monday announced former attorney general and fisheries official Feleti Teo as its new prime minister, after he was elected unopposed by lawmakers in the Pacific Islands nation, officials said.

Former Prime Minister Kausea Natano lost his seat in a general election on Jan. 26 closely watched by Taiwan, China, the US and Australia, amid a geopolitical tussle for influence in the South Pacific.

Tuvalu, with a population of about 11,200 spread across nine islands, is one of three remaining Pacific allies of Taiwan, after Nauru cut ties last month and switched to Beijing, which had promised more development help.

Teo received unanimous support from the 16 lawmakers, two lawmakers told Reuters on Monday.

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Teo, who was educated in New Zealand and Australia, was Tuvalu’s first attorney general. He has decades of experience as a senior official in the regional fisheries organisation and has worked with the Pacific Islands Forum, the region’s major political and economic group. Fishing is a major source of revenue in the Pacific islands.

“Feleti Teo was declared by the Governor General as Prime Minister for Tuvalu,” Tuvalu’s government secretary, Tufoua Panapa, said in an emailed statement.

Tuvalu lawmaker Simon Kofe congratulated Teo in a social media post.

“It is the first time in our history that a Prime Minister has been nominated unopposed,” he said.

The election result in Tuvalu had been delayed by a month as dangerous weather stopped boats from bringing new lawmakers to the capital to vote for prime minister, highlighting why climate change is the top political issue in the Pacific Islands nation.

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Taiwan’s foreign ministry said its ambassador to Tuvalu, Andrew Lin, expressed Taiwan President Tsai Ing-wen’s congratulations to Teo, adding that deputy foreign minister Tien Chung-kwang will visit Tuvalu in the near future.

Teo is a friend of Taiwan’s and has visited many times, and has said relations are stable and that maintaining ties is the widespread consensus in Tuvalu, the ministry added.

Taiwan previously said it was paying close attention to the election after Tuvalu’s finance minister in the previous government, Seve Paeniu, said the issue of diplomatic recognition of Taiwan or China should be debated by the new government.

There had also been calls by some lawmakers to review a wide-ranging deal signed with Australia in November, that allows Canberra to vet Tuvalu’s police, port and telecommunication cooperation with other nations, in return for a defence guarantee and allowing citizens threatened by rising seas to migrate.

The deal was seen as an effort to curb China’s rising influence as an infrastructure provider in the Pacific Islands.

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Teo’s position on Taiwan ties, and the Australian security and migration pact, have not been made public.

Australia’s Prime Minister Anthony Albanese said on social media he looked forward to working with Teo.

“Australia deeply values our relationship with Tuvalu, in the spirit of the Falepili Union,” he wrote, referring to the migration pact.

Tuvalu’s ministry would be announced at an oath taking ceremony for the new government later this week, Panapa said.

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