India's Crony Capitalism: Modi's Pal Adani's Wealth Grows at the Expense of Ordinary Bangladeshis and Indians

Prime Minister Shaikh Hasina has agreed to buy expensive electricity from India in spite of a power glut in Bangladesh, according to a report in the Washington Post. The newspaper quotes B.D. Rahmatullah, a former director general of Bangladesh’s power regulator, as saying, "Hasina cannot afford to anger India, even if the deal appears unfavorable." “She knows what is bad and what is good,” he said. “But she knows, ‘If I satisfy (Gautam) Adani, Modi will be happy.’ Bangladesh now is not even a state of India. It is below that.”  The Washington Post report says: "Facing a looming power glut, Bangladesh in 2021 canceled 10 out of 18 planned coal power projects. Mohammad Hossain, a senior power official, told reporters that there was “concern globally” about coal and that renewables were cheaper". 

Gautam Adani (L) and Narendra Modi

India Ranks  High on Crony Capitalism Index. Source: Economist 

Hasina recently visited New Delhi to seek political and economic assistance from the Indian Prime Minister Narendra Modi. This summit was preceded by Bangladesh Foreign Minister Abdul Momen's trip to India where he said,  "I've requested Modi government to do whatever is necessary to sustain Sheikh Hasina's government".  Upon her return from India, Sheikh Hasina told the news media in Dhaka, "They (India) have shown much sincerity and I have not returned empty handed". It has long been an open secret that Indian intelligence agency RAW helped install Shaikh Hasina as Prime Minister of Bangladesh, and her Awami League party rely on New Delhi's support to stay in power. Bangladesh Foreign Minister Abdul Momen has described India-Bangladesh as one between husband and wife. In an interview with Indian newspaper 'Ajkal,' he said, "Relation between the both countries is very cordial. It's much like the relationship between husband and wife. Though some differences often arise, these are resolved quickly."  Both Bangladeshi and Indian officials have reportedly said that Sheikh Hasina "has built a house of cards". 

Shaikh Hasina (L) with Narendra Modi

The Washington Post reports that the Modi government has changed laws to help Adani’s coal-related businesses and save him at least $1 billion. After a senior Indian official opposed supplying coal at a discount to Adani and other business tycoons, he was removed from his job by the Modi administration, according to the paper.  Modi has continued to support Adani's business with discounted coal even after telling the United Nations he would tax coal and ramp up renewable energy. India is the world's third largest carbon emitter

World's Top 5 Carbon Emitters. Source: Our World in Data

While the coal prices have declined to the level before the start of the Ukraine War, Adani’s power would still cost Bangladesh 33% more per kilowatt-hour than the publicly disclosed cost of running Bangladesh’s domestic coal-fired plant, according to  Tim Buckley, a Sydney-based energy finance analyst. 

India's Crony Capitalism: Adani Enterprises Stock Up 56,000% on Modi's Watch

Gautam Adani has become India's richest and the world's second richest person (after Elon Musk) since the election of Prime Minister Narendra Modi in 2014. Financial Times calls Adani "Modi's Rockefeller".  Adani's rise owes itself to India's crony capitalism, according to  France's Le Monde. Here's an excerpt of a Le Monde story on Adani: 

"Adani has not invented some revolutionary technology or disruptive business model. His meteoric success cannot be attributed to innovation. In each sphere of activity among his conglomerates – airports, ports, mining, aerospace, defense industry – the Indian state plays a significant role, whether in allocating licenses or signing contracts. He is known as a close friend of Indian Prime Minister Narendra Modi, who also hails from Gujarat, a state in western India".  

Adani has lent his personal airplanes to Modi for BJP's election campaigns. Adani has also recently taken over NDTV, the only Indian major TV channel known for its independence from the BJP government. This takeover has forced Prannoy and Radhika Roythe, the  channel's founding couple, to step down. It has also forced out Ravish Kumar, a harsh critic of the Modi regime who hosted a number of popular shows like Hum Log, Ravish ki Report, Des Ki Baat, and Prime Time.

Income Inequality Map. Source: World Inequality Report 2022

India is one of the most unequal countries in the world, according to the World Inequality Report 2022. There is rising poverty and hunger. Nearly 230 million middle class Indians have slipped below the poverty line, constituting a 15 to 20% increase in poverty. India ranks 94th among 107 nations ranked by World Hunger Index in 2020. Other South Asians have fared better: Pakistan (88), Nepal (73), Bangladesh (75), Sri Lanka (64) and Myanmar (78) – and only Afghanistan has fared worse at 99th place. Meanwhile, the wealth of Indian billionaires jumped by 35% during the pandemic. 

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Riaz Haq said…
Princeton Economist Ashoka Mody: How India’s growth bubble fizzled out


https://www.livemint.com/news/india/how-india-s-growth-bubble-fizzled-out-11574004165054.html

The slowdown is not a short-term disruption. What can replace India’s finance-construction growth model?

As the finance-led growth model collapses, India must invest in its future. India will need at least a generation to build necessary human capital alongside more productive urban spaces

India’s gross domestic product (GDP) growth has slowed sharply from 8% a year last year to 5% in the second quarter this year. Optimists, Indian and international, say growth will pick up soon. The International Monetary Fund (IMF) projects the Indian economy will hum at 7.5% a year by 2021. Such optimism is dangerous.


----------

’Shining India’ years

Domestic policymakers and international observers celebrated the high headline growth numbers. Indian software producers gained disproportionate spotlight as markers of success. In March 1999, the Bengaluru-based Infosys became the first Indian-registered company to be listed on the Nasdaq stock exchange. In March 2000, the then US President Bill Clinton visited India, making a stop in Hyderabad, dubbed “Cyberabad" under the tech-savvy chief minister Chandrababu Naidu. Clinton spoke in awe of India’s dazzling diaspora in the US Silicon Valley; he applauded India’s young multimillionaires.

Some months before Clinton’s visit, in October 1999, a BJP-led coalition had gained a stable majority in the Lok Sabha. But the essential philosophy established by Manmohan Singh—more open markets, financial deregulation—remained unchanged.

India now decisively missed the second wave of global competition in labour-intensive products. When, on 11 December, 2001, China became a member of the World Trade Organization, Chinese exporters powered into the new markets opened up to them.

India’s finance-construction growth model continued apace. In 2003 and 2004, two new private banks, Kotak Mahindra and Yes Bank, joined the crowded financial field. The BJP built more highways, which created more need for private finance and gave more fillip to construction. The barely hidden nexus of politician, bureaucrat, and financier became tighter. India steadily became one of the world’s most unequal economies. The BJP’s 2004 Lok Sabha campaign with the slogan “Shining India" felt hollow and cynical to far too many people.

Human capital

Losing to international competition in this second wave failed again to bring home the message that India lacked a core ingredient of success: human capital. From the time of the industrial revolution in the late 18th century, economic growth and human capital development had been closely related. Each round of successful new entrants on to the global stage had pushed the human development frontier further.

The Americans achieved near-universal high school education in the early 20th century and they followed it up after the Second World War with the spread of state-financed universities. The East Asians understood this historical lesson well.

Even for labour-intensive manufacturing, quality and timely production required a high degree of industrial literacy. East Asian—including by now Chinese—schools got steadily better; the governments there began the task of building world-class universities.

In India, the illusion continued. The years 2003 to 2008 were heady. Although China was chewing up export market shares, it was also a major importer of raw materials and industrial products. Thus, the Chinese boom fuelled extraordinary global trade volumes. The entire world rode that rising global tide—and so did India.

Riaz Haq said…
India’s economic activity looks set to slow as resilience wanes

https://www.livemint.com/news/india/indias-economic-activity-looks-set-to-slow-as-resilience-wanes-11671410895765.html

India’s economy appeared to slow rather than accelerate last month, as high-frequency indicators tracked by Bloomberg signaled worsening business and consumption activity.


Although a dial measuring so-called animal spirits showed activity was steady for a fifth straight month in November, the needle was just one bad data point away from swinging to the left. Exports, a key growth lever in the past year, was among three of eight metrics that performed poorly. The rest were unchanged.

Bloomberg’s dashboard reflects a broadly grim outlook for 2023 as tighter global interest rates take a toll on demand. The gauge uses a three-month weighted average to smooth out volatility in single-month readings.

Below are more details:

Business Activity

Purchasing managers’ surveys for November showed that activity across the services and manufacturing sectors improved, though the three-month weighted average was still weak. New orders expanded at faster rates in both sectors, while output prices rose at the quickest pace in three months.

Pollyanna De Lima, economics associate director at S&P Global Market Intelligence, said the latest results are good news, even if the trend for inflation is somewhat concerning. “Evidence of stubborn inflation may prompt further hikes to the policy rate at a time when global economic challenges could negatively impact" India’s growth, she said.

Exports barely improved last month, increasing 0.6% from a year ago after declining 16.7% in October, data released by the trade ministry showed. Only half of the 30 sectors posted growth. The government attributed the tepid performance to weak demand for engineering and iron ore products.

Imports climbed 5.4 percent, keeping India’s trade gap above $20 billion for the eighth consecutive month. That adds pressure to the country’s current account deficit, a key vulnerability for the economy and the rupee, the worst-hit major Asian currency this year after the Japanese yen.

Consumer Activity

Demand for bank credit remained healthy at 17.2 percent, even amidst tighter liquidity conditions and higher borrowing costs, Reserve Bank of India data showed. Goods and services tax collection, which helps measure consumption in the economy, rose 11 percent, a modest performance compared to October’s 24 percent jump.

Market Sentiment

Electricity consumption, a widely used proxy to gauge demand in the industrial and manufacturing sectors, was weak, with the peak requirement last month rising to 162 gigawatts from 155 gigawatts in October. India’s unemployment rate climbed to 8 percent, according to data from the Centre for Monitoring Indian Economy Pvt.
Riaz Haq said…
#India opposition’s ‘unity march’ against #hate reaches #NewDelhi. Rahul Gandhi: "Hindu-Muslim hatred (by #BJP/#Modi) is being spread twenty-four-seven to divert your attention from real issues” #BharatJodoYatraInDelhi @RoflGandhi_ https://aje.io/fkl3hb via @AJEnglish

The cross-country march enters the capital where Congress leader Rahul Gandhi attacks Modi’s BJP for ‘spreading Hindu-Muslim hatred’.

A cross-country march led by Indian opposition leader Rahul Gandhi has reached the capital New Delhi after passing through eight states, hoping to regain some of the popularity it lost to the ruling Hindu nationalist party.

Tens of thousands of people have joined Gandhi’s “Unite India March” against “hate and division”, which aims to turn the Congress party’s fortunes around after its drubbing by the Bharatiya Janata Party (BJP) in two successive national elections.

“Hindu-Muslim hatred is being spread twenty-four-seven to divert your attention from real issues,” Gandhi said in his speech at the Mughal-era Red Fort in the Indian capital.

“They will spread hate. We will spread love,” he said, referring to Prime Minister Narendra Modi’s BJP.

Hindu nationalism has surged under Modi and his party, which have been criticised over rising hate speech and violence against Muslims in recent years. Opponents say Modi’s silence emboldens right-wing groups and threatens national unity, but his party has denied this.

“There are concerns about the plight of minorities, the shrinking space for dissent, as well as the government’s handling of the pandemic and the economy,” said Al Jazeera’s Pavni Mittal, reporting from New Delhi.

“Analysts say the Congress’s inability to be an effective opposition and hold the government accountable has contributed to the BJP’s unprecedented success,” she added.

The Nehru-Gandhi family has controlled the Congress party for decades but has also overseen its recent decline. The party currently governs just three of India’s 28 states.

Rahul Gandhi resigned as Congress president after the last general election. The next national polls are due by 2024.

Plagued by a leadership crisis and series of electoral routs, the Congress in October elected Mallikarjun Kharge, its first non-Gandhi president in 24 years, in an attempt to shed the image of being run by a single family.

Kharge on Saturday wrote on Twitter the march is “against the politics of inflation, unemployment, inequality, and hatred”.

“[This] national mass movement has gathered the hopes of crores [millions] of people by reaching the throne of power,” he posted.

The march will take a nine-day break in New Delhi before starting its final leg on January 3 towards Srinagar, the main city in Indian-administered Kashmir in the north.

Congress leader Jairam Ramesh told journalists on Saturday the march – which is broadcast live on a website – has completed nearly 3,200km (1,988 miles) so far in nine states.

Gandhi’s mother and former Congress president Sonia Gandhi, his sister and party leader Priyanka Gandhi Vadra and her husband Robert Vadra joined Saturday’s march in the capital.

Sharing a picture of himself hugging his mother during the rally, Gandhi tweeted: “The love I have received from her is what I am sharing with the country.”

Actor-turned-politician Kamal Haasan also joined the march on Saturday.

Passing through hundreds of villages and towns, the march has attracted farmers worried about rising debt, students complaining about increasing unemployment, civil society members and rights activists who say India’s democratic health is in decline.

In multiple impassioned speeches during the march, Gandhi often targeted Modi and his government for doing very little to address the growing economic inequality in India, the rising religious polarisation, and the threat posed by China.

The armies of India and China are locked in a bitter standoff in the mountainous Ladakh region since 2020. Despite over a dozen rounds of talks at military, political and diplomatic levels, the standoff has protracted.


Riaz Haq said…
India's nominal GDP growth is likely to fall in 2023-24, hurting tax collections and putting pressure on the federal government to reduce the budget gap by cutting expenses ahead of national elections in 2024.

https://www.reuters.com/world/india/fall-india-nominal-gdp-growth-fy24-challenge-fiscal-math-2023-01-09/


Nominal GDP growth, which includes inflation, is the benchmark used to estimate tax collections in the upcoming budget to be presented on Feb. 1. It is estimated to be around 15.4% for the current financial year.

At least four leading economists expect nominal GDP growth to come in between 8% and 11% as inflation slows and real GDP growth eases from an estimated 7% this year, when pandemic-related distortions and pent-up demand pushed up growth rates.

A lower tax revenue will limit the government's ability to spend and support the economy as the country heads to national elections in 2024. It will also strain efforts to bring down the fiscal deficit towards the medium-term target of 4.5% of GDP by 2025/26.

Riaz Haq said…
#Modi's Pal #Adani, The World’s 3rd Richest Man, Is Pulling The Largest Con In Corporate History. He has engaged in a brazen #stocks #manipulation and accounting #fraud scheme over the course of decades. #Hindutva #BJP #CronyCapitalism #India #economy https://hindenburgresearch.com/adani/


By Hindenburg Research

Today we reveal the findings of our 2-year investigation, presenting evidence that the INR 17.8 trillion (U.S. $218 billion) Indian conglomerate Adani Group has engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades.
Gautam Adani, Founder and Chairman of the Adani Group, has amassed a net worth of roughly $120 billion, adding over $100 billion in the past 3 years largely through stock price appreciation in the group’s 7 key listed companies, which have spiked an average of 819% in that period.
Our research involved speaking with dozens of individuals, including former senior executives of the Adani Group, reviewing thousands of documents, and conducting diligence site visits in almost half a dozen countries.
Even if you ignore the findings of our investigation and take the financials of Adani Group at face value, its 7 key listed companies have 85% downside purely on a fundamental basis owing to sky-high valuations.
Key listed Adani companies have also taken on substantial debt, including pledging shares of their inflated stock for loans, putting the entire group on precarious financial footing. 5 of 7 key listed companies have reported ‘current ratios’ below 1, indicating near-term liquidity pressure.
The group’s very top ranks and 8 of 22 key leaders are Adani family members, a dynamic that places control of the group’s financials and key decisions in the hands of a few. A former executive described the Adani Group as “a family business.”
The Adani Group has previously been the focus of 4 major government fraud investigations which have alleged money laundering, theft of taxpayer funds and corruption, totaling an estimated U.S. $17 billion. Adani family members allegedly cooperated to create offshore shell entities in tax-haven jurisdictions like Mauritius, the UAE, and Caribbean Islands, generating forged import/export documentation in an apparent effort to generate fake or illegitimate turnover and to siphon money from the listed companies.
Gautam Adani’s younger brother, Rajesh Adani, was accused by the Directorate of Revenue Intelligence (DRI) of playing a central role in a diamond trading import/export scheme around 2004-2005. The alleged scheme involved the use of offshore shell entities to generate artificial turnover. Rajesh was arrested at least twice over separate allegations of forgery and tax fraud. He was subsequently promoted to serve as Managing Director of Adani Group.
Gautam Adani’s brother-in-law, Samir Vora, was accused by the DRI of being a ringleader of the same diamond trading scam and of repeatedly making false statements to regulators. He was subsequently promoted to Executive Director of the critical Adani Australia division.
Gautam Adani’s elder brother, Vinod Adani, has been described by media as “an elusive figure”. He has regularly been found at the center of the government’s investigations into Adani for his alleged role in managing a network of offshore entities used to facilitate fraud.
Our research, which included downloading and cataloguing the entire Mauritius corporate registry, has uncovered that Vinod Adani, through several close associates, manages a vast labyrinth of offshore shell entities.
We have identified 38 Mauritius shell entities controlled by Vinod Adani or close associates. We have identified entities that are also surreptitiously controlled by Vinod Adani in Cyprus, the UAE, Singapore, and several Caribbean Islands.
Riaz Haq said…
#Modi's Pal #Adani, The World’s 3rd Richest Man, Is Pulling The Largest Con In Corporate History. He has engaged in a brazen #stocks #manipulation and accounting #fraud scheme over the course of decades. #Hindutva #BJP #CronyCapitalism #India #economy https://hindenburgresearch.com/adani/


Suspected Stock Parking Entities Accounted For As Much As 30%-47% Of ‘Delivery Volume’ In Adani Stocks, Reinforcing Concerns Of Circuitous Trading & Market Manipulation
“That Would Be Alarming…Being 40% Delivery…Is Too Much. More Like Cornering The Stock”—Institutional Trader Of Indian Stocks
The stock parking entities bought and sold stock in the market, sometimes in a synchronized manner, according to exchange data and disclosures in the annual reports of Adani listed companies.[31]

We analyzed these disclosures as a percentage of delivery volumes – a unique, daily data point provided by Indian exchanges that captures large institutional flows and excludes day-trading activity.[32] The data point captures trading among Foreign Portfolio Investors (FPIs), such as the suspect Mauritius entities, which are not allowed to day trade in the cash market in India.

Using the top ten shareholder disclosures by Adani listed companies, which display granular detail on purchase and sale activities of these shareholders, we analyzed the activity of the stock parking entities – Monterosa, Elara, and New Leaina[33] – and also constructed a wider dataset which included four other Mauritius shareholders with portfolios having suspiciously concentrated holdings in Adani stocks. These suspicious offshore entities are EM Resurgent Fund, Asia Investment Corporation, Emerging India Focus, and Capital Trade and Investment.

The trading patterns suggest that the stock parking entities and the suspicious offshore entities may have artificially inflated the volume and/or price of some Adani listed companies.

Suspicious Trading Pattern #1: Adani Transmission—Up To 47% Of Delivery Volume Was Through Stock Parking Entities And Suspicious Offshore Entities
The stock parking entities accounted for 30%, 2%, and 8% of the delivered volume in Adani Transmission for each of 2018, 2019, and 2020. [34]

--------------

The second former Elara (India Opportunities Fund) employee further stated:

“That´s precisely the advantage of, you know, these kind of vehicles. So that you have the illusion of float but there is no float. There is no float, and the price can be really anything, right. I mean, you can take the price up to whatever you want it. And after a while, you don´t even have to do that. There are guys in the market who will do it for you.”

They also expressed a strong belief that the Elara India Opportunities fund was owned by the Adani promoter group:

“I think this is definitely held by the Adani Group…Because no one else would want to buy [it]. I mean, as any investor why would you invest with Adani Group? Because you know that the stock is inflated, you know that they cannot be trusted.”

“And then, you know, looking at the business, I mean it’s a house of cards, it´s all fueled on debt. And, you know, if the Modi government goes out of power, maybe the whole thing will come crashing down. And I think that this is really how brazen this is happening. It´s like, almost like the Russia of the late 90s, that´s what´s happening.”
Riaz Haq said…
#Modi's Pal #Adani, The World’s 3rd Richest Man, Is Pulling The Largest Con In Corporate History. He has engaged in a brazen #stocks #manipulation and accounting #fraud scheme over the course of decades. #Hindutva #BJP #CronyCapitalism #India #economy https://hindenburgresearch.com/adani/


Suspected Stock Parking Entities Accounted For As Much As 30%-47% Of ‘Delivery Volume’ In Adani Stocks, Reinforcing Concerns Of Circuitous Trading & Market Manipulation
“That Would Be Alarming…Being 40% Delivery…Is Too Much. More Like Cornering The Stock”—Institutional Trader Of Indian Stocks
The stock parking entities bought and sold stock in the market, sometimes in a synchronized manner, according to exchange data and disclosures in the annual reports of Adani listed companies.[31]

We analyzed these disclosures as a percentage of delivery volumes – a unique, daily data point provided by Indian exchanges that captures large institutional flows and excludes day-trading activity.[32] The data point captures trading among Foreign Portfolio Investors (FPIs), such as the suspect Mauritius entities, which are not allowed to day trade in the cash market in India.

Using the top ten shareholder disclosures by Adani listed companies, which display granular detail on purchase and sale activities of these shareholders, we analyzed the activity of the stock parking entities – Monterosa, Elara, and New Leaina[33] – and also constructed a wider dataset which included four other Mauritius shareholders with portfolios having suspiciously concentrated holdings in Adani stocks. These suspicious offshore entities are EM Resurgent Fund, Asia Investment Corporation, Emerging India Focus, and Capital Trade and Investment.

The trading patterns suggest that the stock parking entities and the suspicious offshore entities may have artificially inflated the volume and/or price of some Adani listed companies.

Suspicious Trading Pattern #1: Adani Transmission—Up To 47% Of Delivery Volume Was Through Stock Parking Entities And Suspicious Offshore Entities
The stock parking entities accounted for 30%, 2%, and 8% of the delivered volume in Adani Transmission for each of 2018, 2019, and 2020. [34]

--------------

The second former Elara (India Opportunities Fund) employee further stated:

“That´s precisely the advantage of, you know, these kind of vehicles. So that you have the illusion of float but there is no float. There is no float, and the price can be really anything, right. I mean, you can take the price up to whatever you want it. And after a while, you don´t even have to do that. There are guys in the market who will do it for you.”

They also expressed a strong belief that the Elara India Opportunities fund was owned by the Adani promoter group:

“I think this is definitely held by the Adani Group…Because no one else would want to buy [it]. I mean, as any investor why would you invest with Adani Group? Because you know that the stock is inflated, you know that they cannot be trusted.”

“And then, you know, looking at the business, I mean it’s a house of cards, it´s all fueled on debt. And, you know, if the Modi government goes out of power, maybe the whole thing will come crashing down. And I think that this is really how brazen this is happening. It´s like, almost like the Russia of the late 90s, that´s what´s happening.”
Riaz Haq said…
Adani Under Fire From Hindenburg for Conglomerate's Business Practices

https://www.wsj.com/livecoverage/stock-market-news-today-01-25-2023/card/india-s-richest-man-under-fire-from-short-seller-who-queried-nikola-20cM56LZlEZ9F6F267A1

Shares in several companies linked to India's richest man, Gautam Adani, fell after U.S. short-selling firm Hindenburg Research released a lengthy report that alleged fraud at the billionaire's namesake conglomerate.

The seven India-listed companies, which include Adani Enterprises and Adani Transmission, fell between 1.5% and 8.9% on Wednesday.

Prices of dollar-denominated debt owed by some Adani-affiliated companies dropped after publication of the report. Adani Green Energy's 4.375% bonds due 2024 traded at 80.1 cents on the dollar Wednesday, down from 92 on January 11, the last reported trade, according to MarketAxess.

Hindenburg said it conducted a two-year investigation into Mr. Adani's business practices, and has taken a short position in the group's companies through U.S.-traded bonds and non-Indian-traded derivative instruments.

"We are shocked that Hindenburg Research has published a report ...without making any attempt to contact us or verify the factual matrix," Jugeshinder Singh, Adani Group's chief financial officer, said in a statement. He said the report contained misinformation and "baseless and discredited allegations."

Mr. Adani, 61 years old, is an industrialist who saw his fortunes rise over a few decades as he built his business empire across green energy, power and gas distribution. He is currently ranked fourth on the Bloomberg Billionaires Index, with an estimated net worth of $119 billion.

Mr. Adani’s business interests touch the lives of millions of Indians on a daily basis: his coal mines and power plants provide electricity to huge swaths of the country, while his companies also sell the piped gas and edible oils that families use to cook meals. Last year, Adani Group struck a deal of up to $10.5 billion to buy two Indian-listed cement companies, turning his conglomerate into one of the country’s biggest producers of cement.

Hindenburg Research was founded by Nathan Anderson. Previous targets of its skeptical research include Nikola Corp., the electric truck maker whose founder Trevor Milton was later convicted of securities fraud.
Riaz Haq said…
Hindenburg’s Short Sell Call Shaves $12 Billion Off Adani Stocks
US firm takes short position, claims corporate malpractice
Two-year probe by Hindenburg uncovers web of Adani shell firms
https://www.bloomberg.com/news/articles/2023-01-25/adani-group-stocks-drop-after-hindenburg-takes-short-position?leadSource=uverify%20wall

Shares in Adani Group companies lost $12 billion in market value after US investor Hindenburg Research said it was shorting the conglomerate’s stocks and accused firms owned by Asia’s richest person of “brazen” market manipulation and accounting fraud.

Bonds and shares of Adani-related entities slumped after Hindenburg, an investment research firm that specializes in short-selling, made wide-ranging allegations of purported corporate malpractice following a two-year investigation into Gautam Adani’s companies.
Riaz Haq said…
The #Adani Short Sale Puts #Investor Trust in #India in Doubt. More than anything else, it is this threat of darkness creeping up on India’s #markets that should worry investors in the #Hindenburg-Adani saga. #Modi #CronyCapitalism #Fraud #Corruption https://www.washingtonpost.com/business/energy/the-adani-short-sale-puts-investortrust-in-india-in-doubt/2023/01/26/fd6dd812-9d3b-11ed-93e0-38551e88239c_story.html

By Andy Mukherjee Bloomberg

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If Hindenburg is right, then a network of shadowy operators has placed itself right in the middle of those conflicting impulses, and is exerting outsize influence over India’s markets from overseas in cahoots with corporate honchos back home. Meanwhile, within India, ever-rising stock prices have become a symbol of muscular national pride. And that, more than the allegations about Adani stocks, is what should worry global investors: Are India’s public markets trustworthy?

To borrow a phrase from development scholar Lant Pritchett, the Securities and Exchange Board of India ensures perfect isomorphic mimicry. Regulated entities tick much the same boxes they would in a developed market. As in the West, a growing number of these requirements deal with corporate governance. But scratch the surface of disclosures and unsavory characters show up: “briefcase investors,” masquerading as Mauritius-domiciled funds, available to any company boss who wants a little buzz in their stock.


The Indian regulator is busy chasing technical yardsticks, such as beating the US on the speed of the local market’s settlement cycle. But exchange of assets is only partly about efficiency. Above all, it’s about trust, and exemplary punishment — like in the case of Enron Corp. and Bernie Madoff — for those who break it. Is SEBI waiting for a public outcry to go in and clean up the market?

Proximity of family-controlled businesses to political power is an old problem, and by no means unique to India. But the rise of jingoistic nationalism in recent years is adding a new element of impunity to the behavior of some corporate chiefs. Who needs a share prospectus when a yoga guru can tell his followers in an open meeting that anyone buying into his edible-oil company will become wealthy. To project oneself as the flagbearer of a proud, self-reliant India is increasingly seen as a ticket to avoiding scrutiny by the media, regulators or environmental groups, all of whom can be denounced for not being on board with the chauvinistic chest-thumping.

More than anything else, it is this threat of darkness creeping up on India’s markets that should worry investors in the Hindenburg-Adani saga.
Riaz Haq said…
Top #Investor Bill Ackman says #Hindenburg's report on #India's #Adani Group 'highly credible'. Shares in seven listed group companies of #Modi's pal Adani lost $10.73 billion in market capitalization in India on Wednesday after Hindenburg report release. https://www.businesstoday.in/latest/corporate/story/bill-ackman-says-hindenburgs-report-on-adani-group-highly-credible-367721-2023-01-27

Billionaire investor William Ackman in a tweet on Thursday said that he found short-seller Hindenburg Research's report on Adani Group "highly credible and extremely well researched."

Shares in seven listed group companies of Adani lost $10.73 billion in market capitalisation in India on Wednesday after Hindenburg released the report, which accused the conglomerate of improper use of offshore tax havens and also said it held short positions in the company through its U.S.-traded bonds and non-Indian-traded derivative instruments.

"We are not invested long or short in any of the Adani companies... nor have we done our own independent research," Ackman said in a tweet.

https://twitter.com/BillAckman/status/1618790427339137024?s=20&t=GwJBqs_-wYHPNDZNnjfDrg


Riaz Haq said…
History's Biggest Stock Scam in India: Modi's Pal Adani Loses $50 Billion in 3 Days

Business empire of #Asia’s richest man and #Modi’s pal #Adani hit by sell-off after fraud report. Shares fall 20% after the release of #Hindenburg #research report. #India #cronycapitalism #BJP

Business empire of Asia’s richest man hit by sell-off after fraud report

The sell-off came after Hindenburg Research in New York accused Adani of artificially boosting his share prices over the course of several decades.

By Gerry Shih


https://www.washingtonpost.com/world/2023/01/27/india-adani-fraud-hindenberg-selloff/


By the end of Friday, shares in Adani Enterprises, the group’s umbrella holding company, fell by more than 18 percent, while several other subsidiaries, including Adani’s renewable energy and electricity transmission businesses, fell by 20 percent. The seven publicly traded Adani companies lost roughly a combined $50 billion in market capitalization this week, according to Bloomberg News.
Riaz Haq said…
India market regulator increases scrutiny of Adani group - sources

https://finance.yahoo.com/news/india-market-regulator-increases-scrutiny-083851364.html


India’s market regulator has increased scrutiny of deals by the Adani Group over the past year and will study a report issued by short-seller Hindenburg Research to add to its own ongoing preliminary investigation into the group’s foreign portfolio investors, according to two sources aware of the matter.

On Wednesday, the U.S. short-seller said it held short positions in the Indian conglomerate, accusing it of improper use of offshore tax havens and flagging concerns about high debt, leading to a massive sell-off of India-listed shares of the conglomerate's companies.

“SEBI has been increasingly examining all the transactions that Adani Group has been undertaking in the listed space," said the first of the two sources, who declined to be identified as the matter is confidential. SEBI has been increasingly asking for disclosures that it ordinarily does not.

Adani earlier this week dismissed the Hindenburg report as baseless and said it is considering whether to take legal action against the New York-based firm.

SEBI spokespersons did not offer any immediate comments saying they do not discuss company specific matters and ongoing probes.

In the case of Adani Group’s acquisition of Switzerland-based Holcim Ltd's stake in India's Ambuja Cements Ltd and ACC Ltd, the regulator examined the offshore special purpose vehicle (SPV) used for the transaction, the first source said.

The use of this SPV was disclosed by the group as part of the acquisition announcement in May 2022. The regulator had found as many as 17 foreign offshore entities involved in the funding of the transaction.

The regulator had sought clarity from the group on these entities when the group approached it for regulatory clearance last year. These responses are under regulatory examination, sources said.

Hindenburg's report on the Adani group comes amid a $2.45 billion secondary share sale by the group's flagship company Adani Enterprises. On Friday, shares of Adani Enterprises fell below the price at which shares are being offered as part of the issue.

In July, the regulator had initiated a probe of little-known offshore funds based out of Mauritius which had large holdings in Adani's Group's listed companies, which potentially raised concerns about stock price manipulation.

At the time, the regulator's investigation hit a wall due to lack of information from jurisdictions where these funds were domiciled.

Some issues raised in the Hindenburg report point to concerns similar to what the regulator had regarding movement of funds between parties related to the Adani Group through offshore funds back into local companies, sources said.

Riaz Haq said…
Skeletons in #Modi's Closet: #Adani Scam, 2002 Anti-#Muslim Pogrom in #Gujarat. #Hindutva #Islamophobia #Adaniscam #GujaratFiles #India #BBCDocumentary https://www.newslaundry.com/2023/01/27/cartoon-skeletons-in-the-closet

https://twitter.com/haqsmusings/status/1619192934091603969?s=20&t=d3h_DKx1k036mIzWLp4Aig
Riaz Haq said…
Jawhar Sircar
@jawharsircar
I know from 40 years in Govt that LIC’s big investments need a nod from FM or PM. Don’t know why they’re out to destroy an excellent institution that caters to middle class!

https://twitter.com/jawharsircar/status/1619041716182433796?s=20&t=10oQMrIj4Z4XNhpVKfQoxA

------------


Jawhar Sircar
@jawharsircar
Swiss Credit Sights had warned long ago. Modi Govt did not listen. Our banks will now sink — your money, my money will go down — while Adani goes away scot free!

https://twitter.com/jawharsircar/status/1619217523504988161?s=20&t=10oQMrIj4Z4XNhpVKfQoxA
Riaz Haq said…
Behind The #Adani Group’s ‘House Of Cards’: Juicy Fees For #US Wall Street #Investment Banks. The Adani Group companies and Adani-owned #offshore shell companies lend each other money as a way to #launder money and cook their books. #moneylaundering https://www.forbes.com/sites/johnhyatt/2023/01/26/behind-the-adani-groups-house-of-cards-juicy-fees-for-wall-street-banks/?sh=c2cacc6b1311

Global investment banks have cashed in on the Adani Group’s voracious appetite for debt. Now their client is accused of pulling off ‘the largest con in corporate history’

Last summer, after the Adani Group completed its $10.5 billion leveraged buyout of a cement business from Swiss firm Holcim, Gautam Adani, the conglomerate’s mastermind and then world’s fifth richest man, boasted to the Economic Times that his “relationship banks” – Barclays, Deutsche Bank and Standard Chartered Bank – had “fully funded” the deal.

Those relationships may come under strain, following the publication of short seller Hindenburg Research’s explosive 32,000-word report, which alleges that the Adani Group and its principals have engaged in a years-long scheme of fraud and stock market manipulation. (The Adani Group has denied all wrongdoing and says it is considering legal action against the investment firm.)

Founded in the 1980s as a commodities trading firm, the Adani Group has grown into a $23 billion (annual sales) conglomerate with seven publicly-traded firms involved in energy, industrial and logistics businesses across India. The family-run enterprise has close ties to Prime Minister Narenda Modi, and its access to loans from Indian banks has largely funded the firm’s acquisition-driven growth.

In recent years however, U.S and European-based investment banks have stepped up to help the Adani Group raise billions of dollars through equity sales, refinancings and U.S. dollar debt offerings. In addition to the Adani Group’s “relationship” banks, J.P. Morgan, Bank of America Merrill Lynch and Credit Suisse have all brokered deals on behalf of Adani-owned companies.

Between 2015 and 2021, six different Adani Group companies raised about $10 billion through U.S-dollar-denominated bond sales that were underwritten by U.S. and European investment banks, according to financial market data provider Refinitiv. Of these 18 bond offerings, 14 were done between May 2019 and September 2021. One of these companies, Adani Ports & Special Economic Zone - which receives preferential tax treatments - was responsible for half the debt raised.

These figures do not include the Adani Group’s debt issued in Rupees and other currencies. The conglomerate had about $27 billion in outstanding liabilities as of March 2022. The State Bank of India provided funding for about 40% of debt Adani firms issued between 2020 and 2022.

Leverage is at the heart of Hindenburg Research’s fraud allegations. The Adani Group companies and Adani-owned offshore shell companies lend each other money as a way to launder money and cook their books, Hindenburg alleges. Hindenburg homed in on several loans between Adani entities, including a $253 million loan from a Mauritius-based shell company – which appears to be controlled by Guatam Adani’s brother, Vinod Adani – to a private Adani-owned entity, which then lent $138 million to Adani Enterprises, a publicly traded company. In another instance, Emerging Market Investment DMCC, a United Arab Emirates-based entity with virtually no online presence, inexplicably had $1 billion, which it lent to Mahan Energen, a subsidiary of Adani Power.

“It’s a house of cards, it’s all fueled on debt,” one anonymous employee of Elara India Opportunities, a London-based company that manages various funds invested in Adani companies, told Hindenburg.
Riaz Haq said…
Behind The #Adani Group’s ‘House Of Cards’: Juicy Fees For #US Wall Street #Investment Banks. The Adani Group companies and Adani-owned #offshore shell companies lend each other money as a way to #launder money and cook their books. #moneylaundering https://www.forbes.com/sites/johnhyatt/2023/01/26/behind-the-adani-groups-house-of-cards-juicy-fees-for-wall-street-banks/?sh=c2cacc6b1311


Concerns about the Adani Group’s debt load have long shadowed the company. In 2019, Indian news outlet Scroll.in published an investigation on Adani Group’s web of related party deals, including how Adani-owned entities “saw multiple transfers of money between themselves in the form of loans and repayments.” Fitch Group’s CreditSights group published a report last year warning that the Adani Group is “deeply overleveraged.”

Adani has a knack for securing investor funds. “My projects are immensely bankable," he told Forbes Asia back in 2014. The conglomerate’s focus on real infrastructure projects – with their reliable cash flows – were part of the draw. “Banks are willing to take a long-term view as these are much required assets for the country with assured returns," K. Shankar, a power analyst at Edelweiss Capital, a financial services firm in Mumbai, told Forbes at the time.

Wall Street only began to really warm up to Adanis when he sought financing for Adani Green Energy, the conglomerate’s renewable energy subsidiary, according to Tim Buckley, a former investment banker at Citigroup and director at Australia-based Climate Energy Finance, who has been studying the Adani Group for over a decade. Money raised by Adani Green Energy or Adani Ports may “just get transferred to Adani Power and Adani Enterprises, and then goes towards building more coal fired power plants or more coal mines,” Buckley says.

As of June 2021, over $420 million of Adani Green Energy shares were owned by a Cyprus-based entity, New Leaina Investments, which allegedly is owned by Adani Group executives, according to Hindenburg. That offshore holding effectively allowed Adani Green to skirt Indian regulations that require listed companies to maintain a non-promoter public float of at least 25%, alleges Hindenburg.

The Adani Group’s plan to develop the world’s largest coal mine in Australia provoked the Stop Adani campaign. J.P. Morgan, Bank of America Merrill Lynch, Credit Suisse, Barclays, Standard Chartered and Deutsche Bank have all sworn off financing the controversial project, though all appear to still be doing business with the parent group.

“Adani’s involvement in massive new thermal coal mines in the midst of the climate crisis hasn’t been enough to convince some major banks such as Deutsche Bank, Standard Chartered and Barclays to cut ties,” says Pablo Brait, a campaigner at Australian environmental finance organization Market Forces. “Hopefully these significant allegations will finally help all banks wake up to the risks of financing Adani.”

It remains to be seen how bankable Adani will be in the months ahead. Barclays, Deutsche Bank, JP Morgan and Bank of America all declined to comment on their relationship to the Adani Group. Standard Chartered Bank said it doesn’t comment on client relationships due to confidentiality. And Credit Suisse had not responded at the time of publication.
Riaz Haq said…
#Adani Bond Plunge Accelerates as #Hindenburg Rebuttal Fails to Stem Concern. #Modi #Cronycapitalism #India #fraud - Bloomberg

https://www.bloomberg.com/news/articles/2023-01-30/adani-bond-plunge-accelerates-as-rebuttal-fails-to-stem-concern

A plunge in dollar bonds of Adani Group companies quickened on Monday after a rebuttal by the Indian conglomerate failed to ease concerns following a scathing report last week by short seller Hindenburg Research.

Adani Ports & Special Economic Zone Ltd.’s 2027 note dropped 7.1 cents on the dollar to 72 cents in Hong Kong, hitting a fresh low following an 11 cent tumble last week, Bloomberg-compiled data show. The selloff in billionaire Gautam Adani’s corporate empire had already erased more than $50 billion of equity market value as Asia’s richest man struggles to contain the fallout.

At least eight other Adani corporate bonds dropped by more than two cents on the dollar Monday in volatile trading, as the value of the company’s debt has plunged by hundreds of millions of dollars in less than a week.

The Adani group published a 413-page rebuttal of allegations of fraud by Hindenburg on Sunday as its flagship company seeks to complete a share sale. Hindenburg Research said in response that the rebuttal has failed to specifically answer most of the questions it posed, and the group “largely confirmed or attempted to sidestep our findings.”



“US investors had been selling Friday and that has fed into today’s price action,” said Kaveh Namazie, a credit strategist at Australia & New Zealand Banking Group Ltd. “Investors are also likely waiting for more clarity on the Adani Enterprises follow-on-public offering and whether there are any delays or price adjustments to the institutional portion that was completed last week.”

Shorting Bonds
Hindenburg said last week that it had taken a short position in Adani’s companies through US-traded bonds and non-Indian-traded derivative instruments.

In Adani’s rebuttal published Sunday, the group said that some 65 of the 88 questions have been addressed in its public disclosures, describing the short seller’s conduct as “nothing short of a calculated securities fraud under applicable law.” The conglomerate reiterated it will “exercise our rights to pursue remedies to safeguard our stakeholders before all appropriate authorities.”

The lengthy response comes in the last leg of a share offer by Adani Enterprises, which received overall subscriptions of 1% for the institutional and retail portion on Friday.


While investors in Indian public offerings typically wait until the last day of the sale to place bids, there were concerns that Hindenburg’s attack on the country’s richest man would sour sentiment. The sale to anchor investors, which includes Abu Dhabi Investment Authority, was priced at the upper end of the band.

Riaz Haq said…
Markets reject Adani's defense! Selling of #Adani shares continued on Monday and has lowered the #market value of the 7 companies in the group by around $64 billion. #Hindenburg #India #Modi #Scam #BJP #Fraud #Hindutva #Islamophobia https://www.barrons.com/articles/adani-trouble-problem-india-stock-51675084823

Shares of companies linked to Gautam Adani 541450 –19.99% , India’s richest person, have been tumbling following allegations from a short seller, allegations Adani has denied. The selloff, though, could have an impact on the broader Indian stock market.

Stocks linked to Adani, including Adani Total Gas 542066 –20.00% (ATGL.India) and Adani Green Energy (ADANIGREEN.India), have slumped since Hindenburg Research released a short seller report about the Indian billionaire’s companies. Adani Enterprises 512599 +4.21% , his energy and infrastructure group, published a 413-page response on Sunday—it called the allegations “nothing but a lie.” Adani Enterprises didn’t immediately respond to Barron’s request for further comment on Monday.

The selling continued on Monday, however, and has lowered the market value of the seven companies in the group by around $64 billion, FactSet data showed. In fact, Adani stocks have slumped so much that they appear to be weighing on the Indian stock market, according to Gavekal Research. The MSCI India Index has fallen 3.4% since the report was released on Jan. 24, while the MSCI Emerging Markets Index has gained 1.2%.

That wouldn’t be a big deal, except that India had a much better year than emerging markets as a whole in 2022. The iShares MSCI India ETFINDA +0.09% (INDA) fell just 9% last year, while the iShares MSCI Emerging Markets ETFEEM –1.61% (EEM) dropped 21%. Indian stocks also trade at a premium to emerging markets, with the India ETF trading at 21.4 times to the Emerging Market ETF’s 12.5 times.


And that valuation differential alone might be enough for investors to consider how much exposure they want to India stocks, Gavekal said.

“Whether the allegations of fraud at the Adani Group prove well founded or
not, expect them to lead to closer scrutiny of Indian asset valuations,” wrote Gavekal’s Udith Sikand.
Riaz Haq said…
Heard on the Street: #Adani Group saga is a credibility test for #India’s markets and institutions. How #NewDelhi reacts will greatly affect foreign #investors’ perception of the country’s attractiveness. #Modi #CronyCapitalism #economy
https://www.wsj.com/articles/adani-group-saga-is-credibility-test-for-indias-markets-institutions-11675098415?st=h1m4yjy59fk6e3f via @WSJ

The sprawling conglomerate built by Gautam Adani is under attack by short seller Hindenburg Research, which successfully deflated electric-vehicle maker Nikola Motors in 2020. At stake is both Mr. Adani’s empire and, potentially, India’s own ambitions to position itself as a credible alternative to China—as a manufacturing giant and a must-have part of an emerging-markets portfolio.

U.S.-based Hindenburg Research, which last week said it held short positions in Adani Group through its U.S.-traded debt and offshore derivatives, has accused the conglomerate of accounting fraud and stock manipulation through opaque offshore entities. Adani Group denies the allegations and says the short seller is trying to smear its reputation and derail a public stock offering. Shares of the group’s companies have plunged since Hindenburg’s report, wiping out nearly $64 billion in market value. Hindenburg’s report comes amid a $2.5 billion secondary share sale by Adani Enterprises 512599 4.21%increase; green up pointing triangle that closes on Tuesday.

The Indian government now faces a stark choice.

Reuters reports that India’s markets regulator is already looking into Hindenburg’s allegations as an extension of its own, previously stalled investigation. Foreign investors, who hold a large chunk of the conglomerate’s sizable debt, may be reluctant to keep financing it until they are confident that the regulator has thoroughly assessed Hindenburg’s claims. Yields on the group’s dollar bonds have leapt: an Adani Ports & Special Economic Zone Ltd. 532921 -0.29%decrease; red down pointing triangle dollar bond maturing in 2027 was yielding 12% on Monday, according to FactSet, up from less than 7% in mid-January. Yields on an Adani Green Energy Ltd. ADANIGREEN -20.00%decrease; red down pointing triangle bond maturing in 2024 have risen to 15%.

On the other hand, if a government investigation were to unearth real financial problems, India’s public-sector banks and insurers might end up holding the bag: Brokerage CLSA estimates, for example, that state-controlled banks have lent Adani Group companies the equivalent of about 6% of their fiscal year 2024 net worth. And Adani Group is a major part of the effort to upgrade India’s chronically poor infrastructure and thus its competitiveness.

Infrastructure is a capital-intensive business, so it is little surprise that Adani Group has a heavy debt load. Still, the group’s debt has risen precipitously in recent years. Net debt sits at 1.6 trillion Indian rupees, equivalent to $19.63 billion, while consolidated gross debt is 1.9 trillion Indian rupees, or $23.31 billion, according to Jefferies. Total debt at five major Adani companies rose about 76% from fiscal year 2019 to fiscal year 2022, according to data from CLSA, while earnings before interest, taxes, depreciation and amortization is up 120%. Flagship firm Adani Enterprises’ ratio of net debt to trailing Ebitda is 5.8, according to FactSet. That is much higher than peer Reliance Industries, which stands at 1.5. And Adani Enterprises shares fetch 112 times prospective earnings.

Foreign investors have also played an increasing role in financing Adani Group’s expansion in recent years, leaving it vulnerable to a change in sentiment. CLSA calculates that 29% of total debt at five major group companies—Adani Power 533096 -5.00%decrease; red down pointing triangle, Adani Green, Adani Ports, Adani Enterprises and Adani Transmission—is in foreign-currency bonds. But the brokerage estimates that 49% of the debt increase from fiscal year 2019 to fiscal year 2022 came from foreign-currency bonds.

-------------

The stakes could hardly be higher for both India and Adani Group.
Riaz Haq said…
#Adani Rout Hits $68 Billion as Fight With #Hindenburg Intensifies. Most Adani stocks declined again on Monday, flagship gained. The conglomerate’s dollar bonds also extended a plunge. #India #stocks #Modi #StockMarketindia https://www.bloomberg.com/news/articles/2023-01-30/most-adani-stocks-drop-as-rebuttal-draws-hindenburg-response?leadSource=uverify%20wall
Riaz Haq said…
2022 CORRUPTION PERCEPTION INDEX REVEALS NEGLECT OF ANTI-CORRUPTION EFFORTS IN ASIA PACIFIC
Nearly 90 per cent of countries have made no significant progress since 2017


https://www.transparency.org/en/press/2022-corruption-perceptions-index-neglect-anti-corruption-efforts-asia-pacific

ASIA PACIFIC HIGHLIGHTS

The CPI ranks 180 countries and territories by their perceived levels of public sector corruption on a scale of zero (highly corrupt) to 100 (very clean).

The Asia Pacific average holds at 45 for the fourth consecutive year, and over 70 per cent of countries rank below 50.

New Zealand (87), Singapore (83), Hong Kong (76) and Australia (75) lead the region.
Afghanistan (24), Cambodia (24), Myanmar (23) and North Korea (17) are the lowest in the region.
Singapore (83) and Mongolia (33) are at historic lows this year.
While many countries have stagnated, countries in Asia Pacific made up nearly half of the world’s significant improvers on the CPI since 2017.

The significant improvers are: South Korea (63), Vietnam (42) and the Maldives (40).
Three countries declined over this time: Malaysia (47), Mongolia (33) and Pakistan (27).
For each country’s individual score and changes over time, as well as analysis for each region, see the region’s 2022 CPI page.

CORRUPTION PERVASIVE IN ASIA PACIFIC

Across Asia Pacific, governments have claimed they would tackle corruption, but few have taken concrete action. Pervasive corruption and crackdowns on civic space leave the situation dire.

Malaysia (47) has been declining for years as it struggles with grand corruption in the wake of the monumental 1MDB and other scandals implicating multiple prime ministers and high-level officials. The current prime minister has promised to clean up but still appointed a deputy prime minister with serious corruption allegations as part of efforts to stabilise his unity government.
In India (40), considered the largest democracy in the world, the government continues to consolidate power and limit the public’s ability to demand accountability. They detain more and more human rights defenders and journalists under the Unlawful Activities Prevention Act (UAPA).
Massive protests erupted in Sri Lanka (36) as the government’s financial mismanagement resulted in an economic meltdown in the country. Noting the link between pervasive corruption among the country’s leadership and the crisis, Sri Lankans demanded anti-corruption reforms and refused to leave the streets despite brutal police crackdowns.
After years of decline, Australia (75) is showing positive signs this year. Most notably, the government elected last year fulfilled its promise to pass historic legislation for a new National Anti-Corruption Commission. Yet there is still more work that needs to be done, including more comprehensive whistleblower protection laws, and caps and real time disclosure on political donations. Greater transparency and longer cooling off periods to reduce the 'revolving doors' of lobbying must also be prioritised.
In parts of the Pacific, governments have interfered in elections, denying the public the opportunity to have their voices heard. Even with its history of electoral strife, Papua New Guinea’s (30) August election was called its worst ever amid numerous irregularities, stollen ballot boxes and even bouts of violence. In the Solomon Islands (42), frustration with reported collusion between politicians and foreign companies boiled over into violent civil unrest late last year. Now, the government has delayed elections scheduled for until 2024 raising further concerns over the abuse of executive power.
Transparency International calls on governments to prioritise anti-corruption commitments, reinforcing checks and balances, upholding rights to information and limiting private influence to finally rid the world of corruption – and the instability it brings.

Riaz Haq said…
India Bubble Bursts:
Adani Stock Crash at $92 Billion as Collateral Worries Grow
Flagship’s shares tumble 28% in their worst day on record
Stock rout intensifies despite completion of key share sale

https://www.bloomberg.com/news/articles/2023-02-01/adani-flagship-falls-after-last-minute-completion-of-share-sale


The crisis of confidence plaguing Gautam Adani has taken a sudden turn for the worse, with a record 28% plunge in his flagship company’s stock raising questions over the extra collateral he needs to cover loans.

Adani Enterprises Ltd. plummeted in afternoon trading in Mumbai after Bloomberg reported Credit Suisse Group AG has stopped accepting bonds of Adani Group’s firms as collateral for margin loans to its private banking clients. Banks including Barclays Plc had earlier asked for more shares to cover a $1 billion loan.

With the rout in the group’s stocks triggered by short seller Hindenburg Research’s fraud allegations reaching $92 billion on Wednesday, the risk is that more financial institutions start to scrutinize their exposure to the indebted conglomerate. Without a dramatic upturn, investors who bought into a recently completed $2.5 billion stock sale by Adani Enterprises may be staring at deep losses.

“The problem now is that the dynamics are becoming a self-reinforcing negative feedback loop and investors are now just dumping the shares and asking questions later,” said Peter Garnry, head of equity strategy at Saxo Bank A/S.


Credit Suisse’s private banking arm has assigned a zero lending value for notes sold by Adani Ports and Special Economic Zone Ltd., Adani Green Energy and Adani Electricity Mumbai Ltd., according to people familiar with the matter. It had previously offered a lending value of about 75% for the Adani Ports notes, one of the people said.

When a private bank cuts lending value to zero, clients typically have to top up with cash or another form of collateral and if they fail to do so, their securities can be liquidated.

Loan Collateral
On Friday, Adani added about $300 million worth of shares for the $1 billion loan made by a group of banks, according to people familiar with the matter.

“The Adani family might need to pledge more shares given the drop in share prices, though they could still maintain a healthy headroom with the portion pledged at no more than 40%, based on our calculation,” Sharon Chen, credit analyst at Bloomberg Intelligence, wrote in a note.

Adani Debts Enter Spotlight as Dollar Bond Deadlines Loom

Adani Power and Adani Ports had the highest portion of shares pledged as of December, according to Bloomberg Intelligence. Adani Power slid 5% on Wednesday. The port unit sank 19%, the most on record.

The equity selloff comes after Adani Enterprises pulled off a successful share sale, which was India’s largest follow-on offering. At least two of India’s biggest business families, including Sajjan Jindal and Sunil Mittal, participated, according to people familiar with the matter, in a sign of solidarity with the billionaire.

Adani Enterprises shares sank to as low as 1,941.20 rupees on Wednesday, 38% below the lower end of the offer price range of 3,112 to 3,276 rupees. The firm is expected to announce the final price for its offering later today.

“The important thing to watch now post allotment is what level of holding period the investors are willing to have on these shares,” said Sameer Kalra, founder of Target Investing in Mumbai. “Having a few investors getting most of the allotment, there is a risk of some portion being sold immediately.”

Riaz Haq said…
India Bubble Bursts:
Adani Stock Crash at $92 Billion as Collateral Worries Grow
Flagship’s shares tumble 28% in their worst day on record
Stock rout intensifies despite completion of key share sale

https://www.bloomberg.com/news/articles/2023-02-01/adani-flagship-falls-after-last-minute-completion-of-share-sale

“The important thing to watch now post allotment is what level of holding period the investors are willing to have on these shares,” said Sameer Kalra, founder of Target Investing in Mumbai. “Having a few investors getting most of the allotment, there is a risk of some portion being sold immediately.”

Adani Stock Sale Scrapes Through With Less Demand Than Peers

Personal Wealth
Adani has now lost the title as Asia’s richest person to rival billionaire Mukesh Ambani, according to the Bloomberg Billionaires Index. In just one week, his eye-popping wealth gains from last year, some $44 billion, have evaporated.

The storm engulfing Adani has become a test case for India as well, with Hindenburg’s allegations raising questions over the country’s corporate governance, while Adani himself has called the report an attack on India itself.

Market watchers see the fight between Adani and Hindenburg continuing, after the two traded barbs earlier in the week. The Indian conglomerate has called Hindenburg’s report “bogus,” threatened legal action and said it was “a calculated securities fraud” in its 413-page rebuttal, which the short seller said ignored all its key allegations and was “obfuscated by nationalism.”

“Cash generation at Adani companies remains poor while they have traded at extremely high multiples. So, their servicing capability of debt can be impaired if things do not go as per the plan,” said Amit Kumar Gupta, CIO of New Delhi-based Fintrekk Capital. “Now the issue is if stock prices don’t go up, this leverage is detrimental to the group.”

Riaz Haq said…
#Adani calls off $2.5 billion share sale in major blow to #Indian tycoon. Adani Group is “returning the FPO proceeds and withdraws the completed transaction” #scam #fraud #Modi #India #stockmarket #economy

https://sg.finance.yahoo.com/news/indias-adani-enterprises-calls-off-165657372.html

By Aditya Kalra

NEW DELHI (Reuters) -India's Adani Enterprises called off its $2.5 billion share sale on Wednesday, citing market conditions, amid an ongoing rout in the wider Adani Group's stocks which was sparked by a U.S. short-seller's critical report.

"Given the unprecedented situation and the current market volatility the Company aims to protect the interest of its investing community by returning the FPO proceeds and withdraws the completed transaction," the company said in a statement.

Shares in Indian billionaire Gautam Adani's conglomerate plunged, driving the value of his companies $86 billion lower, with the tycoon also losing his crown as Asia's richest person.

"Today the market has been unprecedented, and our stock price has fluctuated over the course of the day. Given these extraordinary circumstances, the Company’s board felt that going ahead with the issue will not be morally correct," Adani said.

"The interest of the investors is paramount and hence to insulate them from any potential financial losses, the Board has decided not to go ahead with the FPO," he added in a statement.

The withdrawal marks a stunning setback for Adani, the school dropout-turned-billionaire whose fortunes rose rapidly in recent years in line with stock values of his businesses.

Adani, whose business interests span ports, airports, mining, cement and power, is battling to stabilise his companies and defend his reputation.

Adani Group had on Tuesday mustered enough support from investors for the share sale for Adani Enterprises to proceed, in what some saw as a stamp of investor confidence.

But after a brief respite the selloff in Adani Group stocks and bonds resumed on Wednesday, with shares in Adani Enterprises plunging 28% and Adani Ports and Special Economic Zone dropping 19%, the worst day on record for both.

(Reporting by Aditya Kalra and Jahnavi Nidumolu in Bengaluru; Editing by Anil D'Silva, Kirsten Donovan and Alexander Smith)
Riaz Haq said…
Citigroup Wealth Unit Halts Margin Loans on Adani Securities

https://www.bloomberg.com/news/articles/2023-02-02/citigroup-s-wealth-unit-halts-margin-loans-on-adani-securities

Private bank unit removes lending value with immediate effect
Move comes after Credit Suisse stopped accepting some bonds

Citigroup Inc.’s wealth arm has stopped accepting securities of Gautam Adani’s group of firms as collateral for margin loans as banks ramp up scrutiny of the Indian tycoon’s finances following allegations of fraud by short seller Hindenburg Research.

The US lender’s move to restrict lending comes after a similar change at Credit Suisse Group AG, as Adani’s beleaguered empire becomes further engulfed in crisis.

Riaz Haq said…
#Adani market losses stretch to $100bn after #FPO share sale abandoned. #Indian group has now lost almost half its $223 billion market value since Jan. 25, when #Hindenburg Research said in a report that it had taken short positions in Adani. #Fraud #Scam https://asia.nikkei.com/Business/Companies/Adani-Group/Adani-market-losses-stretch-to-100bn-after-share-sale-abandoned

BENGALURU -- Adani Group stocks plummeted on Thursday after its flagship company scrapped a fully subscribed share sale the day before, deepening losses in the Indian conglomerate's market value to over $100 billion in the wake of scathing short-seller allegations.

The secondary share issue, which was expected to be India's largest-ever follow-on public offering, was seen as critical for the conglomerate and its abandonment has stoked swirling concerns over the group's outlook.

Shares in the flagship Adani Enterprises plunged 26.5% on Thursday, while those of Adani Green Energy, Adani Transmission and Adani Total Gas all fell 10%; India's benchmark stock index rose 0.38%.

Gautam Adani, the group's billionaire chairman, said in a recorded message on Thursday morning that the company had withdrawn the secondary sale to "insulate investors from potential losses."

The conglomerate had said in a statement to the stock exchange late on Wednesday that the company's board "felt that going ahead with the [share] issue will not be morally correct." Adani Enterprises stock had closed trading on Wednesday 30% below the floor price of the $2.5 billion share sale.

The conglomerate has now lost almost half its $223 billion market value since Jan. 25, when Hindenburg Research said in a report that it had taken short positions in Adani companies through U.S.-traded bonds and "non-Indian-traded derivative instruments." The report also made a host of accusations against the conglomerate, including "brazen stock manipulation and accounting fraud."

India's opposition parties on Thursday demanded an investigation into the Hindenburg allegations, upending a parliamentary session that had been set to focus on the country's newly unveiled budget.

The sprawling conglomerate, which has emerged as a central player in India's push to develop world-class infrastructure, has denied the allegations, calling them "baseless" and "a calculated attack on India."

But lenders Credit Suisse and Citigroup have stopped accepting bonds from various Adani Group companies as collateral for margin loans, Bloomberg has reported, citing sources. Both banks declined to comment when approached by Nikkei Asia.

In a rebuttal to Hindenburg last week, the conglomerate had touted "deep bank relationships" with a range of financial institutions, including Citi and Credit Suisse.

"The biggest threat of the [Adani] dispute will be on what impact it has on foreign investor confidence," Charu Chanana, a Singapore-based market strategist at Saxo Markets, wrote in a report this week. "The sentiment has turned slightly bearish on India in general, given the risks of political influence and lack of transparency. While these risks are inherent to the Indian markets and well aware to investors, the risk-reward for the Indian markets has just taken another turn for the worse."

Foreign investors have been jumpy about Indian equities, turning net sellers immediately after the Hindenburg report came out. Their net outflow from Jan. 25 to Feb. 1 stood at 168.5 billion rupees ($2.1 billion), including 61.3 billion rupees on Jan. 30, the highest single-day outflow by foreign investors since mid-June, according to stock exchange data. However, they turned net buyers of Indian equities on Thursday, with net inflows of 25.42 billion rupees.
Riaz Haq said…
There’s Evidence That The #Adani Group Likely Bought Into Its Own $2.5 Billion #FPO Share Sale. #Elara #Monarch #India #Scam #Fraud #Modi #HindenburgReport
https://www.forbes.com/sites/johnhyatt/2023/02/01/theres-evidence-that-the-adani-group-likely-bought-into-its-own-25-billion-share-sale/

Two companies accused by Hindenburg Research of assisting the Adani Group in its alleged conspiracy of accounting fraud and stock market manipulation were underwriters in Adani Enterprises’ $2.5 billion share offering Monday, which was abruptly cancelled on Wednesday.

Elara Capital (India) Private Limited, a subsidiary of London-based investment firm Elara Capital, and Monarch Networth Capital, an Indian brokerage firm, were two of the 10 underwriters disclosed by Adani Enterprises in its offer agreement for the sale.

Elara Capital’s India Opportunities Fund, an offshore vehicle that holds $3 billion worth of publicly traded stock in Adani companies (including Adani Enterprises), serves as one of Adani’s “stock parking entities” to skirt Indian regulations, according to allegations from Hindenburg Research.

Monarch Networth Capital, an Indian brokerage firm, has been partially owned by the privately held Adani Properties Private Limited since 2016, according to Hindenburg’s report. Albula, an offshore fund identified by Hindenburg as a proxy of Adani’s, held a 10% ownership stake in Monarch in 2009, according to ownership records cited by Hindenburg.

According to Adani Enterprises’ published offering statement, Elara Capital’s responsibilities in the share offering consisted of “drafting and approval of all publicity material” while Monarch was tasked with “non institutional marketing” to investors.

The fundraising effort, which Adani Enterprises first announced in November, was thrown into chaos on January 24 when Hindenburg Research published its 100-page report, which alleges a years-long conspiracy by the Adani Group to commit accounting fraud and enrich its principals through stock market manipulation. The Adani Group has denied Hindenburg’s report and threatened legal action against the U.S. investment firm, but shortly after this story was first published, Adani Enterprises canceled the offering and said it will refund investors.

Abu Dhabi’s IHC investment firm salvaged the offering with a last-minute injection of $400 million, reportedly with a nudge over the phone by Gautam Adani himself. Two other Indian tycoons, steel mogul Sajjan Jindal and telecom billionaire Sunil Mittal, also subscribed to the follow-on offering in “a last-minute push” the Economic Times and the Financial Times reported, citing sources familiar with the matter.

The involvement of Elara Capital and Monarch Networth Capital, however, raises questions about whether any of Adani’s personal funds were deployed to help meet the $2.5 billion target.

“The only way Adani can actually resolve this issue is to illustrate who did buy all of the shares,” says Tim Buckley, a former investment banker at Citigroup and director at Australia-based Climate Energy Finance, who has been studying the Adani Group for over a decade. “It would be my speculation that there were insiders.”

U.S. hedge fund billionaire Bill Ackman also expressed skepticism about the share offering on Wednesday, tweeting: “I would not find it surprising if the @AdaniOnline offering was rigged with affiliated buyers.”
Riaz Haq said…
There’s Evidence That The #Adani Group Likely Bought Into Its Own $2.5 Billion #FPO Share Sale. #Elara #Monarch #India #Scam #Fraud #Modi #HindenburgReport
https://www.forbes.com/sites/johnhyatt/2023/02/01/theres-evidence-that-the-adani-group-likely-bought-into-its-own-25-billion-share-sale/


In its report, Hindenburg Research cited two former Elara traders who described how its funds are “intentionally designed to conceal their beneficial ownership” and that “it's obvious” that Adani principals own the $3 billion of stock held by the India Opportunities Fund. “I think this is definitely held by the Adani Group…Because no one else would want to buy,” one of the traders told Hindenburg.

The Adani Group denied any connection to Elara Capital’s funds in its rebuttal of Hindenburg’s response. “Innuendoes that they are in any manner related parties of the promoters are incorrect,” the group wrote.

Monarch Networth Capital, in addition to allegedly being partly owned by an Adani Group entity, has a history of business dealings with the company, according to Hindenburg: In 2018, Rakesh Shah, Gautam Adani´s brother-in-law, partnered with Monarch in the purchase of an airline. A year later, Monarch underwrote Adani Green Energy’s $110 million bond offering. Hindenburg wrote: “Given the importance of maintaining SEBI compliance, one would have expected the Adani Group to have chosen experienced, credible bookrunners to manage the deal. Instead, Adani Green Energy chose an entity it could likely influence, if not control outright.” Separately, Monarch was convicted in 2011 of participating in a market rigging scheme.

The Adani Group’s response to Hindenburg did not deny partial ownership of Monarch Networth capital, but said it had partnered with Monarch “for their credentials and ability to tap into the retail market.” The Adani Group also dismissed Monarch’s previous legal run-in as a “1 month suspension more than a decade ago” which has “no further relevance.”

Other underwriters of Adani’s $2.5 billion share included SBI Capital Markets, the investment banking subsidiary of the State Bank of India; Jefferies India Private Limited, a subsidiary of the U.S. investment bank Jefferies; and various Indian financial institutions. The Wall Street banks that have brokered the Adani Group’s dollar-denominated debt offerings in recent years did not participate as underwriters.
Riaz Haq said…
#Adani Rout Wipes Out Half of Group Value Since #Hindenburg Report as brutal stock rout in Adani’s companies continued Friday. The billionaire needs to do more to restore confidence in his conglomerate’s financial health. #India #Modi #Scam https://www.bloomberg.com/news/articles/2023-02-03/adani-stock-rout-continues-as-loan-talks-fail-to-ease-concerns?utm_source=website&utm_medium=share&utm_campaign=twitter via @markets

Adani said to be in seeking prepayment of shares-backed loans
Goldman and JPMorgan tout value in Adani’s beaten-down bonds

The brutal stock rout in Gautam Adani’s companies continued Friday, an indication that the billionaire needs to do more to restore confidence in his conglomerate’s financial health after accusations of fraud by a short-seller erased half of the group’s market value.

The group’s 10 stocks all fell in early Mumbai trading. Flagship Adani Enterprises Ltd. dropped as much as 10%, adding to a nearly 50% plunge in the last two sessions. The losses for the Adani group companies since the short-seller report have extended to $118 billion, one of the worst in India’s history.
Riaz Haq said…
#Adani’s Rise Was Intertwined With #India’s. Now It’s Unraveling. Adani has responded by invoking nationalism, calling #HindenburgReport “a calculated attack on India” #Hindenburg retorted "fraud can't be obfuscated by nationalism" #Modi #scam #fraud https://www.nytimes.com/2023/02/04/business/adani-modi-india.html

The tycoon often said the Adani Group’s goals were in lock step with India’s needs. Now, the company’s fortunes are crashing, a collapse whose pain will be felt across the country.

Gautam Adani began the year as one of the richest men who ever lived, an upstart billionaire whose conglomerate, one of India’s largest, had surged in value by 2,500 percent in five years.

That rise, as he portrayed it, wasn’t his alone: It was inseparable from the “growth story” of India itself. His companies’ goals were in lock step with the country’s needs, he often said. Relying on his longstanding partnership with India’s powerful leader, Narendra Modi, he brought his private companies — spanning power, ports, food and more — into alignment with one politician more closely than any business titan before him.

Now, in spectacular fashion, the fortunes of his Adani Group are crashing down even faster than they had shot up — a collapse whose pain will be felt across the country, rippling through its economic and political spheres.

More than $110 billion in market value — roughly half of the Adani Group’s worth — has vanished in just over a week, like air from a burst balloon. The pinprick was a report by a small New York investment firm, Hindenburg Research, whose description of “brazen accounting fraud” and stock manipulation sent investors fleeing, just as the Adani Group was beginning a sale of new shares to investors, India’s biggest-ever secondary share offering.

Adani wrapped itself in nationalism as a defense, calling the report “a calculated attack on India” and on “the independence, integrity and quality of Indian institutions.” Hindenburg retorted that Adani was waving the flag to obfuscate shady dealings, like the use of offshore shell companies to exaggerate its stocks’ valuations in order to paper over its excessively debt-fueled ascent.

Riaz Haq said…
#AdaniScam: #Taiwan pips #India to reclaim second spot after #China in #MSCI Emerging Market (EM) Index. Taiwan’s weighting in MSCI EM Index rose to 14.2%, behind leader China’s 31.2%, while India’s fell to the third spot with 13%. #Modi #Adani #Fraud https://www.bloomberg.com/news/articles/2023-02-06/adani-rout-drags-india-s-weighting-in-em-index-as-taiwan-gains#xj4y7vzkg

India’s weighting in MSCI’s emerging-market benchmark has dropped after the brutal selloff in Adani Group’s stocks, giving away its second spot to Taiwan after a rally in the latter’s market.

As of the end of January, Taiwan’s weighting in the MSCI Emerging Markets Index rose to 14.2%, behind leader China’s 31.2%, while India’s fell to the third spot with 13%, according to Bloomberg-compiled data. India captured the second spot from Taiwan in August.
Virginia Raines said…
Confiscate Gautam Adani's passport: Cong leader amid ...
https://inshorts.com/en/news/confiscate-gautam-adanis-passport-cong-leader-amid-protests-1675696749970
3 hours ago — Congress leader Bhai Jagtap on Monday demanded that the Centre seize the passport of Gautam Adani to prevent him from escaping the country ...

Gautam Adani passport: "Written letter to PM Modi..." AAP ...
https://economictimes.indiatimes.com/news/politics-and-nation/written-letter-to-pm-modi-aap-mp-sanjay-singh-demands-confiscation-of-gautam-adanis-passport/articleshow/97545843.cms
"I have written a letter to PM, ED, and CBI demanding the confiscation of Adani's passport, or else If he also flees from the country like other ...

Adani woes spur protests as stock turmoil turns political
https://thehill.com/homenews/ap/ap-international/ap-adani-woes-spur-protests-as-stock-turmoil-turns-political/
9 hours ago — Some burnt a suitcase plastered with images of Prime Minister Narendra Modi and Adani. Some protesters scaled police barricades and were ...

Adani crisis spills over into street protests as losses top $110 bln
https://www.livemint.com/market/stock-market-news/adani-news-live-updates-will-fpo-continue-to-see-muted-demand-on-day-2-11675049205070.html
1 hour ago — Adani woes deepen as crisis spills over into street protests. The crisis in Adani Group does not seem to calm down with hundreds of members ...
Riaz Haq said…
#Adani Crisis Tests #India's Investability. India's biggest conglomerate meltdown has cost Adani group companies some $118 billion loss in #market cap. It's overshadowing #Modi's #G20 summit pitch for foreign #investment in India. #Fraud #Scam #Hindutva https://www.bloomberg.com/news/videos/2023-02-07/adani-crisis-tests-india-s-investability-video

Virginia Raines said…
Sustainalytics downgrades three Adani companies governance scores
https://energy.economictimes.indiatimes.com/news/renewable/sustainalytics-downgrades-three-adani-companies-governance-scores/97755394
3 hours ago — Sustainalytics downgraded corporate governance-related scores for three of India's Adani Group companies on ethics concerns, the sustainability ratings ...

Adani Group Companies See ESG Ratings Cut by Sustainalytics
https://www.bnnbloomberg.ca/adani-group-companies-see-esg-ratings-cut-by-sustainalytics-1.1881486
2 minutes ago — Sustainalytics has downgraded the ESG scores of several Adani Group companies, following a report by a short-seller raising concerns about corporate governance at the conglomerate last month.
Virginia Raines said…
Gautam Adani's firms hit with Moody's downgrades
https://nypost.com/2023/02/10/gautam-adanis-firms-hit-with-moodys-downgrades/
5 minutes ago — Moody's downgraded on Friday the ratings outlook for some Adani Group companies, while MSCI said it would cut the weightings of some in its stock indexes, ...

NSE removes Adani Ports, Ambuja Cements, Monarch ...
https://www.businesstoday.in/markets/stocks/story/nse-removes-adani-ports-ambuja-cements-monarch-networth-capital-from-surveillance-framework-369831-2023-02-10
25 minutes ago — Moody's downgraded on Friday the ratings outlook for some Adani Group companies, while MSCI said it would cut the weightings of some in its stock indexes.

Adani rout hits $120 billion as MSCI move raises outflow concerns
https://indianexpress.com/article/business/market/adani-stocks-decline-msci-action-raises-concern-8436853/
33 minutes ago — Adani Group stocks capped another week of losses as a review by MSCI Inc. spurred concern about passive outflows from shares already reeling from the rout ...
Riaz Haq said…
Gautam #Adani’s woes will spur ‘democratic revival in India’, George Soros says. #Modi will ‘have to answer questions’ over #fraud allegations targeting his business ally. #India #BJP #Hindutva #Fascism #Islamophobia
https://www.ft.com/content/58689a0a-4154-45f9-a562-5f0145ec8091


George Soros has predicted India’s prime minister Narendra Modi will be weakened by the woes of business tycoon and close ally Gautam Adani, “opening the door” to a democratic revival in the country.

The 92-year-old billionaire philanthropist said in a speech on Thursday that Modi would “have to answer questions” from foreign investors and parliament on allegations of fraud and stock manipulation at Adani’s industrial empire, noting that Modi had been “silent” on the topic.

Adani Group has come under fierce scrutiny since US short seller Hindenburg accused the company of engaging in “brazen stock manipulation and accounting fraud” over decades.


The power-to-port conglomerate was forced to pull a $2.4bn share sale, after its stock losses mounted to more than $100bn following the report.

Adani Group has denied the claims.

Speaking at the Munich Security Conference, Soros said: “Modi and business tycoon Adani are close allies; their fate is intertwined.

“Adani Enterprises tried to raise funds in the stock market, but he failed. Adani is accused of stock manipulation and his stock collapsed like a house of cards. Modi is silent on the subject, but he will have to answer questions from foreign investors and in parliament.”

Soros, who has become a standard bearer for liberal democracy, warned that Adani’s woes will “significantly weaken Modi’s stranglehold on India’s federal government” and “open the door to push for much needed institutional reforms”.

Soros, who made his fortune as a hedge fund manager, added: “I may be naive, but I expect a democratic revival in India.”


Adani, who was the richest man in Asia until his empire’s shares tumbled, has been a longtime ally of Modi. The tycoon’s wealth has increased since the prime minister came to office in 2014.

In parliament, opposition MPs have seized on Adani’s association with Modi stretching back to the prime minister’s days as chief minister of the western state of Gujarat.

In recent parliamentary sessions, opposition members have disrupted speeches with taunting chants of Modi Adani bhai bhai (“Modi and Adani are brothers”). Some Modi opponents have raised questions over the exposure of taxpayer funds to the conglomerate through the state-owned groups that are lenders or investors.

Modi’s Bharatiya Janata party will face voters in 2024 as the prime minister seeks re-election to a third term.

The crisis engulfing the Indian group is shaping up as a test for the country’s regulators and institutions, including the media. Adani’s business portfolio stretches from ports and airports to power and renewables, and it has foreign projects in about a dozen countries ranging from Israel to Bangladesh.

Soros also said at the conference that “two systems of governance are engaged in a fight for global domination” just as “civilisation is in danger of collapsing because of the inexorable advance of climate change”.

The Hungarian-American businessman, who established the Open Society Foundations to promote democratic governance, said Modi “is no democrat”, noting that “inciting violence against Muslims was an important factor in his meteoric rise”. He added that India “buys a lot of Russian oil at a steep discount and makes a lot of money on it”.

Soros also said Turkey’s president Recep Tayyip Erdoğan “has mismanaged the Turkish economy”, while in China, president Xi Jinping’s “close association with [Russian president] Putin would hurt him”.

He added that “Xi will not remain in office for life, and while he is in office, China will not become the dominant military and political force that Xi is aiming for.”

The Adani group had no immediate comment on Soros’s remarks and a government spokesperson declined to comment.


Riaz Haq said…
Worldview with Suhasini Haidar | BBC-Adani | Is Indian diplomacy on the defensive? - By Suhasini Haider

https://www.thehindu.com/news/international/worldview-with-suhasini-haidar-bbc-adani-is-indian-diplomacy-on-the-defensive/article66521414.ece


What Happened?

1. BBC- Britain’s public broadcaster, that works under the Government’s Department of Media, but is independent, aired a 2 part documentary last month, that raised questions about Prime Minister Narendra Modi’s role as CM of Gujarat, virtually accusing him of being complicit in the killings of 2000 in the Gujarat riots of 2002. The second part looked at the actions of the Modi government at the centre since 2019, and accused it of instigating and condoning majoritarian violence.

Neither parts of the documentary were made available by the BBC to viewers in India.


- The government banned part 1 of the documentary, but did not ban part 2

- The MEA issued a strong statement, accusing the BBC of a colonial mindset

- On February 14 th however, the government began a series of raids on BBC offices in Delhi and Mumbai- confiscating cell phones and computers and looking into the financial records of the company in India. No official has spoken on the record, but sources have alleged financial wrongdoing, non-compliance, and even a link to BBC sponsorship by Chinese companies.

There has been no formal response to the raids or the ban from the British government- officials said they were closely monitoring developments

2. The other big story was a report by an American financial research firm and short seller Hindenberg Research, who accused Adani Enterprises Limited of a number share market manipulations and false filings- the report was denied by AEL, but the company and its subsidiaries took a considerable hit on the stock exchanges, losing about $100 bn in value. The company also claimed the report was a hit-job aimed at damaging India and its economy, not just one company.

A senior minister also slammed a statement by American Investor George Soros, who had called for PM Modi to answer questions about his proximity to the Adani group chief- Minister Smriti Irani called Soros’s speech, and a conspiracy to break indian democracy

This week, Vice President Jagadeep Dhanakhar said in response to what he called attacks on India’s economy as well as the BBC documentary- He was speaking to India’s Information service officers

“We have to boldly neutralise it (the invasion). We cannot allow free fall of doctored narratives to run down our growth story on so-called reputations. “How come Indian mind immediately absorbs something and does not analyse. There is a vicious mechanism designed to afloat a narrative to run down the growth story of this country all in the name of freedom of expression.”

3. In the recent past as well, the government has reacted to International Reports that claim press freedoms in India, and democracy as a whole are under attack.

“We don’t need to be told what to do on democracy. India is perhaps the most ancient civilization in the world as all of you know. In India, democracy had roots going back to 2500 years, we were always a democracy”, Permanent Representative to the UN, Ambassador Ruchira Kamboj said.

4. Also last month, when India came under criticism for increasing its imports of Russian oil- EAM Jaishankar called it western hypocrisy

Dr. Jaishankar said, “ Europe has managed to reduce its imports while doing it in a manner that is comfortable. If at a (per capita income) of €60,000, you are so caring about your population, I have a population of $2,000. I also need energy, and I am not in a position to pay high prices for oil.”

5. In the past years, you may recall, the MEA reacted to criticism from Canadian PM Justin Trudeau on police action against protestors- by freezing bilateral ties for several months. And also issued statements against Pop star Rihanna and Youth environmental activist Greta Thunberg
Riaz Haq said…
Worldview with Suhasini Haidar | BBC-Adani | Is Indian diplomacy on the defensive? - By Suhasini Haider

https://www.thehindu.com/news/international/worldview-with-suhasini-haidar-bbc-adani-is-indian-diplomacy-on-the-defensive/article66521414.ece

What are the major worries for the MEA/Government?

1. Larger trend of criticism in the year of G20

2. Will dent India’s image, and make diplomacy much more difficult

3. Will hurt India’s economic growth, which is just recovering from Covid, the Ukraine War and global recession

4. Come from a colonial mindset- and could lead to racist attacks on India and diaspora

5. Worry of other international mechanisms being used like the HRC, FATF, Media bodies, Democracy bodies etc. As well as sanctions - as they have been against countries like Turkey, Iran, Bangladesh – or worries about isolation

But the reality doesn’t back up these worries- just take a look at the past week

1. PM calls with Biden and Macron, statement by Sunak after Air India deals

2. NSA Doval to Washington UK Moscow- Many agreements on technology cooperation, strategic issues, Afghanistan

3. Jaishankar to Australia, Fiji

4. Upcoming visit of German Chancellor Scholz- NSA , Climate Change envoy visits

5. G20 Foreign Ministers meeting preparations- March 1-2, followed by Raisina Dialogue

6. SCO FM in May, SCO Summit in June, G20 Summit in September

7. State visit invite, Officials say clearly there will be no sanctions against India

There is, therefore little to indicate that Western countries – atleast officially are at all trying to target India in any way or isolate it. Even so, this does take up much of our diplomats time.

How does Defensive diplomacy work?

1. Public statements- of the kind we have seen in the past few weeks

2. Engaging media in foreign countries- interviews, press conferences, editorials

3. Embassies lobbying with Parliamentarians or hiring lobby firms

3. Visa Bans/ Deportations- India has refused visas for members of the US Commission on International Religious Freedoms on many occasions

4. Punitive actions: Legal action like with the BBC/ Visa cancellations

In addition, the government has restricted a number of foreign- mainly western NGOs from working or funding projects in India in a number of specific fields where it feels targetted
Riaz Haq said…
India’s economic activity cooled off at the start of the year as higher borrowing costs tempered demand at home and abroad, signaling more pain ahead as the global economy slows down.

https://www.bloomberg.com/news/articles/2023-02-19/india-s-economic-activity-cools-in-january-amid-slowdown-fears#xj4y7vzkg

The needle on a dial measuring so-called animal spirits moved left and was back where it was for six straight months before showing momentum in December. Falling exports and a slack in manufacturing and services drove the weakness in business activity, offsetting improvement in consumption drivers reflected by tax collections and job growth, according to eight high-frequency indicators tracked by Bloomberg.

Domestic recovery, that has been driving momentum so far, is getting wobbly. The Reserve Bank of India, which has raised borrowing costs six times since May to 6.50 per cent, is seen increasing interest rates again in its April review amid inflation topping estimates and further tightening by global central banks.

Bloomberg’s animal spirits barometer uses a three-month weighted average to smooth out volatility in single-month readings:

Business Activity
Purchasing managers’ surveys indicated activity in both manufacturing and services slacked in January. Output and new orders grew at softer paces, and dragged the composite index lower from an 11-year high in December.

“Although manufacturers received new orders from international markets, the increase was slight at best and moderated considerably to a ten-month low,” said Pollyanna De Lima, economics associate director at S&P Global Market Intelligence.

Exports
Exports fell 6.58 per cent in January from a year ago to US$32.9 billion (S$43.9 billion), data released by the Trade Ministry showed, indicating lower demand for goods abroad. Imports dropped 3.63 per cent from a year earlier and that pushed the trade gap to the lowest in a year, fueling hopes of a significantly narrower current account deficit.

The sharp fall in imports reflects the moderation in discretionary demand in the goods sector and the decline in commodity prices, said Garima Kapoor, economist at Elara Capital.

Consumer Activity
Liquidity in the banking system tightened, but credit growth picked up again, rising 16.33% in January, from 14.87 per cent in December, Reserve Bank of India data show.

Goods and services tax collections, which help measure consumption in the economy, rose 10.5 per cent from a year earlier to 1.56 trillion rupees – a feat achieved only once before in the history of the levy introduced in 2017. New vehicle registrations surged 14 per cent in the month, with passenger vehicle sales growing 22 per cent year-on-year, according to data from the Federation of Automobile Dealers Associations.

Market Sentiment
Electricity consumption, a widely used proxy to gauge demand in the industrial and manufacturing sectors, held steady, with the peak requirement last month rising to 173 gigawatt from 171 gigawatt in December due to increased heating requirements. India’s unemployment rate dropped to 7.14 per cent, from a 16-month high of 8.30 per cent a month ago, according to data from the Centre for Monitoring Indian Economy. BLOOMBERG

Riaz Haq said…
Other countries’ view of India is influenced by calculations and hopes that it can help counter Chinese expansionism in Asia

Written by Christophe Jaffrelot , Pratinav Anil

https://indianexpress.com/article/opinion/columns/india-china-emergency-democracy-7196194/

Today, the international media echo indices of democracy and freedom of expression prepared by institutions like Varieties of Democracy, Freedom House, and Reporters without Borders which are often comparing the evolution of India’s regime to the Emergency.

Researching our book on the Emergency, India’s First Dictatorship (HarperCollins, 2021), we found that the change in regime did not change the way Western democracies perceived New Delhi. Trade was one reason why they looked the other way. India bought Jaguar fighters from the UK, and the two countries set up the Indo-British Economic Committee in January 1976; the trade talks that took place in London in April were well attended, and not only by arms dealers. British support for the Indian government, moreover, was bipartisan, from Labour Left to Tory Right, as Rudra Chaudhuri shows in “Re-reading the Indian Emergency”. Michael Foot suggested that it was a “monstrous lie” that Mrs Gandhi “wanted to be a dictator”. Margaret Thatcher believed the Emergency served the Indians well in “tackling problems like world recession and inflation”. The FCO concurred: “An authoritarian regime is better equipped than a democracy to force through the reforms which are needed to make India less of a burden on the world.” Following this logic, in 1976, the Overseas Development Ministry increased aid to India by over 30 per cent.
Riaz Haq said…
On India, say nothing

https://www.politico.com/newsletters/national-security-daily/2023/03/02/on-india-say-nothing-00085164

No matter how many opportunities the Biden administration gets, officials just can’t get themselves to criticize India.

The latest example comes from Secretary of State ANTONY BLINKEN, who in New Delhi today dodged a question about human rights abuses committed by Prime Minister NARENDRA MODI’s government.

“We have to continue to hold ourselves to our core values, including respect for universal human rights, like freedom of religion or belief, freedom of expression, freedom of assembly — which makes our democracy stronger,” Blinken said in restrained language while stressing the U.S. isn’t perfect, either. He did, however, insist that he raises such topics with his Indian counterpart.

Blinken’s answer was illustrative of how carefully President JOE BIDEN’s team treads when it comes to India. That’s despite the Indian government’s amply documented crackdowns on minorities, the media and civil society. And it has persisted even amid India’s surge in trade with Russia that undermines U.S. sanctions designed to end the war in Ukraine.

The Biden administration considers India a critical counterweight to China. So the U.S. is often reluctant to publicly say anything that might undermine this convenient alliance, even if it harms the administration’s narrative of standing up for human rights and democracy worldwide, human rights advocates say.

The U.S. and India may “speak privately about human rights issues, but problematic governments don’t change their conduct unless they face public scrutiny, so, of course, that’s why it’s important to speak publicly,” said JOHN SIFTON, an advocacy director with Human Rights Watch.

The group sent Blinken a letter ahead of his India trip asking him to raise specific human rights concerns while he was there. The letter urged him to do so “including in your public comments.” (Yes, the italics were in the letter.)

The Indian government, meanwhile, is pursuing what it sees as its national interest. That means joining the United States against China, and buying cheap gas from a needy Russia. It’s easy to have it both ways when both countries need you.

The Indian Embassy in Washington did not immediately respond to a request for comment. But Indian officials have generally denied abusing human rights, often citing legal and security-related reasons for various crackdowns.

Inside the State Department, many diplomats are frustrated by the kid-glove treatment. The caution toward India isn’t just in public settings, they say, but also in internal, private documents.

A Feb. 17 State Department cable from the U.S. Embassy in India, for instance, recounted a 60-hour raid Indian authorities recently carried out at the BBC’s offices in New Delhi. Indian officials called it a “survey” to examine allegations of tax evasion. But it happened to follow Indian fury over a BBC documentary about Modi’s role in past anti-Muslim violence.

What was striking about the unclassified cable, a copy of which NatSec Daily obtained, was how it avoided any real analysis or direct conclusions from U.S. diplomats. Instead, it recited basic facts and relied on the voices of outsiders, such as opposition politicians or Indian journalists, to raise critical points.

“One senior journalist asked why Indian authorities confiscated phones of working level reporters when the alleged tax offenses would have been committed by BBC management,” the cable noted. There was no mention of U.S. officials raising the issue with the Indian government.
Riaz Haq said…
On India, say nothing

https://www.politico.com/newsletters/national-security-daily/2023/03/02/on-india-say-nothing-0008516

One State Department official said the language in the cable showed the challenges of reporting on the reality of India that Washington sometimes does not want to hear. A second State official was more blunt, saying the U.S. Embassy in New Delhi was well-known among diplomats for having “clientitus” — meaning it tends to parrot a host country’s line or at least avoid looking at it through a critical lens.

“Delhi is terrible on any kind of human rights reporting,” the second official said of the embassy there. The officials spoke on condition of anonymity because of the sensitivity of the issue.

A State Department spokesperson declined to comment on the cable, but insisted that U.S. officials regularly engage with top Indian officials on human rights issues.

Riaz Haq said…
"India is Broken" writes Princeton Economist Ashoka Modi. Says #Indians, mostly illiterate and poor, hunger for freedom and prosperity but their politicians from #Nehru to #Modi have “betrayed the economic aspirations” of millions. #BJP https://www.wsj.com/articles/india-is-broken-review-the-difficult-future-for-a-giant-3f65612d?st=l40ilxogdhokc9y via @WSJBooks

Ashoka Mody, who was for many years a senior economist at the International Monetary Fund, is the sort of quietly efficient global technocrat who retires to a professorship at a prestigious school—in his case, Princeton. Yet he’s different from his faceless ilk of briefcase-bearers in one astonishing way: 13 years ago, an attempt was made on his life. The alleged assailant, thought to have been passed over for a job at the IMF by Mr. Mody, shot him in the jaw outside his house in Maryland.

He recovered with remarkable verve, his intellectual drive intact. Yet a mood of gloom and pessimism is unmistakable in “India Is Broken.” Today, 75 years after independence from Britain, Mr. Mody believes that India’s democracy and economy are in a state of profound malfunction. The book’s tale, he writes, “is one of continuous erosion of social norms and decay of political accountability.” You might add that it is also a tale of an audacious political experiment on the brink of failure.

India started its post-independence journey, says Mr. Mody, as “an improbable democracy” whose citizens, mostly illiterate and poor, hungered for freedom and prosperity. Generations of Indian politicians—from Jawaharlal Nehru, the first prime minister, to Narendra Modi, the present one—have “betrayed the economic aspirations” of millions. India’s democracy no longer protects fundamental rights and freedoms in a nation over which “a blanket of violence” has fallen. A belief in “equality, tolerance and shared progress” has disappeared. And the country’s collapse isn’t just political and economic; it’s also moral and spiritual.

------------

A notable weakness in Mr. Mody’s analysis is his denial that the economic policies of Nehru and his successors were socialist. He writes of Nehru’s “alleged socialist legacy” and adds that it is a “mistake to identify central planning or big government as socialism.” Socialism, he insists, “means the creation of equal opportunity for all,” which India’s policy makers weren’t doing. Ergo, India wasn’t socialist.

If these protestations are almost laughable, Mr. Mody’s solution also invites some derision. Hope for India, he says, lies in making it a “true democracy.” And how can that be done? “We must move to an equilibrium in which everyone expects others to be honest.” This “honest equilibrium,” he says, will promote enough trust for Indians to work together “in the long-haul tasks of creating public goods and advancing sustainable development” and awakening “civic consciousness.” Mr. Mody, it is clear, has a dream. It is naïve, and it is corny. India, alas, will continue to be “broken” for many years to come.
Riaz Haq said…
Ex Central Bank Chief Raghu Rajan: 'India dangerously close to Hindu rate of growth'. #Hindu rate of growth is a term describing low #Indian economic growth rates from the 1950s to the 1980s, which averaged around 4%. #Modi #BJP #economy #Hindutva
https://www.deccanherald.com/business/economy-business/india-dangerously-close-to-hindu-rate-of-growth-says-raghuram-rajan-1197442.html

Sounding a note of caution, former Reserve Bank Governor Raghuram Rajan has said that India is "dangerously close" to the Hindu rate of growth in view of subdued private sector investment, high interest rates and slowing global growth.

Rajan said that sequential slowdown in the quarterly growth, as revealed by the latest estimate of national income released by the National Statistical Office (NSO) last month, was worrying. Hindu rate of growth is a term describing low Indian economic growth rates from the 1950s to the 1980s, which averaged around 4 per cent. The term was coined by Raj Krishna, an Indian economist, in 1978 to describe the slow growth.

The Gross Domestic Product (GDP) in the third quarter (October-December) of the current fiscal slowed to 4.4 per cent from 6.3 per cent in the second quarter (July-September) and 13.2 per cent in the first quarter (April-June).


The growth in the third quarter of the previous financial year was 5.2 per cent. "Of course, the optimists will point to the upward revisions in past GDP numbers, but I am worried about the sequential slowdown. With the private sector unwilling to invest, the RBI still hiking rates, and global growth likely to slow later in the year, I am not sure where we find additional growth momentum," Rajan said in an email interview to PTI.

Recently, Chief Economic Advisor V Anantha Nageswaran had attributed the subdued quarterly growth to the upward revision of estimates of national income for the past years. The key question is what Indian growth will be in fiscal 2023-24, Rajan said, adding "I am worried that earlier we would be lucky if we hit 5 per cent growth. The latest October-December Indian GDP numbers (4.4 per cent on year ago and 1 per cent relative to the previous quarter) suggest slowing growth from the heady numbers in the first half of the year. "My fears were not misplaced. The RBI projects an even lower 4.2 per cent for the last quarter of this fiscal. At this point, the average annual growth of the October-December quarter relative to the to the similar pre-pandemic quarter 3 years ago is 3.7 per cent. "This is dangerously close to our old Hindu rate of growth! We must do better." The government, he said, was doing its bit on infrastructure investment but its manufacturing thrust is yet to pay dividends. The bright spot is services, he said, adding "it seems less central to government efforts." On a query regarding the production-linked incentive (PLI) scheme, Rajan said any scheme in which the government pours money will create jobs and any scheme which elevates tariffs on output while offering bonuses for final units produced in India will create production in India, and exports. "A sensible evaluation would ask how many jobs are being created and at what price per job. By the government's own statistics, 15 per cent of the proposed investment has come in but only 3 per cent of the predicted jobs have been created. This does not sound like success, at least not yet," Rajan said.

Furthermore, even if the scheme fully meets the government's expectations over the next few years, it will create only 0.6 crore jobs, a small dent in the jobs India needs over the same period, the former RBI Governor said. "Similarly, government spokespersons point to the rise in cell phone exports as evidence that the scheme is working. But if we are subsidising every cell phone that is exported, this is an obvious outcome.
Riaz Haq said…
Ex Central Bank Chief Raghu Rajan: 'India dangerously close to Hindu rate of growth'. #Hindu rate of growth is a term describing low #Indian economic growth rates from the 1950s to the 1980s, which averaged around 4%. #Modi #BJP #economy #Hindutva
https://www.deccanherald.com/business/economy-business/india-dangerously-close-to-hindu-rate-of-growth-says-raghuram-rajan-1197442.html

Furthermore, even if the scheme fully meets the government's expectations over the next few years, it will create only 0.6 crore jobs, a small dent in the jobs India needs over the same period, the former RBI Governor said. "Similarly, government spokespersons point to the rise in cell phone exports as evidence that the scheme is working. But if we are subsidising every cell phone that is exported, this is an obvious outcome.

The key question is how much value added is done in India. It turns (out to be) very little so far," he said. Rajan said cell phone parts imports have also gone up, so net exports in the cell phone sector, the relevant measure that no one in government talks about, is pretty much where it was when the scheme started. "Except, we have also spent money on subsidies. Foxconn just announced a big factory to produce parts but they have been saying they will invest for a long time. I think we need a lot more evidence before celebrating the success of the PLI scheme," he said.

Currently, Rajan is the Katherine Dusak Miller Distinguished Service Professor of Finance at The University of Chicago Booth School of Business. He further said the most developed economies of the world are largely service economies, so you can be a large economy without a large presence in manufacturing.

"Services do not just account for the majority of our unicorns, services can also provide a lot of semi-skilled jobs in construction, transport, tourism, retail, and hospitality. So let us not deride service jobs – indeed while the fraction of manufacturing jobs has stagnated in India, services have absorbed the exodus from agriculture." "We need to work on both manufacturing and services to create the jobs we need, and fortunately, many of the inputs both (services and manufacturing) need schooling, skilling...," he said.

On what measures the government should take to improve oversight of private family companies to address worries after the Hindenburg allegations on Adani Group, Rajan said: "I don't think the issue is of more oversight over private companies". The issue is of reducing non-transparent links between government and business, and of letting, indeed encouraging, regulators do their job, he said. "Why has SEBI not yet got to the bottom of the ownership of those Mauritius funds which have been holding and trading Adani stock? Does it need help from the investigative agencies?," Rajan wondered.

Adani group has been under severe pressure since the US short-seller Hindenburg Research on January 24, accused it of accounting fraud and stock manipulation, allegations that the conglomerate has denied as "malicious", "baseless" and a "calculated attack on India".

Riaz Haq said…
Hype over #India’s #economic boom is dangerous myth masking real problems. It’s built on a disingenuous numbers game.
No silver bullet that will fix weak job creation, a small, uncompetitive #manufacturing sector & gov’t schemes fattening corporate profits

https://www.scmp.com/comment/opinion/article/3215379/hype-over-indias-economic-boom-dangerous-myth-masking-real-problems

by Ashoka Mody

Indian elites are giddy about their country’s economic prospects, and that optimism is mirrored abroad. The International Monetary Fund forecasts that India’s GDP will increase by 6.1 per cent this year and 6.8 per cent next year, making it one of the world’s fastest-growing economies.
Other international commentators have offered even more effusive forecasts, declaring the arrival of an Indian decade or even an Indian century.
In fact, India is barrelling down a perilous path. All the cheerleading is based on a disingenuous numbers game. More so than other economies, India’s yo-yoed in the three calendar years from 2020 to 2022, falling sharply twice with the emergence of Covid-19 and then bouncing back to pre-pandemic levels. Its annualised growth rate over these three years was 3.5 per cent, about the same as in the year preceding the pandemic.
Forecasts of higher future growth rates are extrapolating from the latest pandemic rebound. Yet, even with pandemic-related constraints largely in the past, the economy slowed in the second half of 2022, and that weakness has persisted this year. Describing India as a booming economy is wishful thinking clothed in bad economics.
Worse, the hype is masking a problem that has grown in the 75 years since independence: anaemic job creation. In the next decade, India will need hundreds of millions more jobs to employ those who are of working age and seeking work. This challenge is virtually insurmountable considering that the economy failed to add any net new jobs in the past decade, when 7 million to 9 million new jobseekers entered the market each year.
This demographic pressure often boils over, fuelling protests and episodic violence. In 2019, 12.5 million people applied for 35,000 job openings in the Indian railways – one job for every 357 applicants. In January 2022, railway authorities announced they were not ready to make the job offers. The applicants went on a rampage, burning train cars and vandalising railway stations.

With urban jobs scarce, tens of millions of workers returned during the pandemic to eking out meagre livelihoods in agriculture, and many have remained there. India’s already-distressed agriculture sector now employs 45 per cent of the country’s workforce.

Farming families suffer from stubbornly high underemployment, with many members sharing limited work on plots rendered steadily smaller through generational subdivision. The epidemic of farmer suicides persists. To those anxiously seeking support from rural employment-guarantee programmes, the government unconscionably delays wage payments, triggering protests.
For far too many Indians, the economy is broken. The problem lies in the country’s small and uncompetitive manufacturing sector.
Riaz Haq said…
India is Broken

https://www.scmp.com/comment/opinion/article/3215379/hype-over-indias-economic-boom-dangerous-myth-masking-real-problems

by Ashoka Mody

Since the liberalising reforms of the mid-1980s, the manufacturing sector’s share of GDP has fallen slightly to about 14 per cent, compared to 27 per cent in China and 25 per cent in Vietnam. India commands less than a 2 per cent global share of manufactured exports, and as its economy slowed in the second half of 2022, the manufacturing sector contracted further.
Yet it is through exports of labour-intensive manufactured products that Taiwan, South Korea, China and now Vietnam came to employ vast numbers of their people. India, with its 1.4 billion people, exports about the same value of manufactured goods as Vietnam does with 100 million people.
Those who believe that India stands at the cusp of greatness usually focus on two recent developments. First, Apple contractors have made initial investments to assemble high-end iPhones in India, leading to speculation that a broader move away from China by manufacturers will benefit India despite the country’s considerable quality-control and logistical problems.

while such an outcome is possible, academic analysis and media reports are discouraging. Economist Gordon H. Hanson says Chinese manufacturers will move labour-intensive manufacturing from the country’s expensive coastal hubs to its less-developed interior, where production costs are lower.
Moreover, investors moving out of China have gone mainly to Vietnam and other countries in Southeast Asia, which like China are members of the Regional Comprehensive Economic Partnership. India has eschewed membership in this trade bloc because its manufacturers fear they will be unable to compete once other member states gain easier access to the Indian market.
As for US producers pulling away from China, most are “near-shoring” their operations to Mexico and Central America. Altogether, while some investment from this churn could flow to India, the fact remains that inward foreign investment fell year on year in 2022.

The second source of hope is the Indian government’s Production-Linked Incentive Schemes, which were introduced in early 2021 to offer financial rewards for production and jobs in sectors deemed to be of strategic value. Unfortunately, as former Reserve Bank of India governor Raghuram G. Rajan and his co-authors warn, these schemes are likely to end up merely fattening corporate profits like previous sops to manufacturers.
India’s run with start-up unicorns is also fading. The sector’s recent boomrelied on cheap funding and a surge of online purchases by a small number of customers during the pandemic. But most start-ups have dim prospects for achieving profitability in the foreseeable future. Purchases by the small customer base have slowed and funds are drying up.
Looking past the illusion created by India’s rebound from the pandemic, the country’s economic prognosis appears bleak. Rather than indulge in wishful thinking and gimmicky industrial incentives, policymakers should aim to power economic development through investments in human capital and by bringing more women into the workforce.
India’s broken state has repeatedly avoided confronting long-term challenges and now, instead of overcoming fundamental development deficits, officials are seeking silver bullets. Stoking hype about an imminent Indian century will merely perpetuate the deficits, helping neither India nor the rest of the world.
Ashoka Mody, visiting professor of international economic policy at Princeton University, is the author of India is Broken: A People Betrayed, Independence to Today. Copyright: Project Syndicate
Riaz Haq said…
After Adani’s Crisis, India’s Vedanta Looks Vulnerable Too
Vedanta Resources is bleeding its subsidiaries dry as it struggles to deleverage

https://www.wsj.com/articles/after-adanis-crisis-indias-vedanta-looks-vulnerable-too-b9c4408b

Struggling Indian infrastructure heavyweight Adani 512599 -1.85%decrease; red down pointing triangle Group hasn’t tipped over any other large dominoes yet. But another sprawling Indian conglomerate—miner Vedanta Resources—is looking wobbly.

Market skittishness in the wake of the turmoil at Adani Group, which came under attack from short seller Hindenburg Research in late January, means that other indebted Indian companies—which otherwise might have muddled their way through the Federal Reserve hiking cycle—could increasingly find themselves under investors’ microscopes. A Vedanta Resources dollar bond due in May 2023 was yielding about 50% on Friday according to Refinitiv—about double the level at the end of January.

The fundamental problem is that London-headquartered Vedanta Resources, with several billion dollars of debt, is reliant on transfers from its Indian subsidiary Vedanta Ltd 500295 2.80%increase; green up pointing triangle. That unit has its own large direct debts, and holds the lion’s share of the group’s actual assets.

Moody’s downgraded the firm’s debt deeper into junk bond territory earlier in the month. The rating agency says it needs about $4 billion in cash to pay off debt and interest coming due over the financial year ending in March 2024.

The company hopes to pay with the help of chunky cash flows from its Indian subsidiaries, but their finances are under pressure too. And Indian politics could make some of those payments difficult to realize.

On Tuesday Mumbai-listed Vedanta Ltd. said it will hand out its fifth dividend of about $927 million for the current financial year ending this month. Vedanta Ltd., 70% owned by Vedanta Resources, has announced dividends of $4.6 billion in the last 12 months, more than double the fiscal year before. But the firm’s interim CFO resigned during the week. Local ratings agency CRISIL Ratings also downgraded its outlook on Vedanta Ltd. to negative from stable, citing possible higher leverage and lower financial flexibility because of big dividend payments to the parent.

Vedanta Ltd.’s unit Hindustan Zinc, partly owned by the government of India, also announced a fourth dividend for the current fiscal year of about $1.3 billion last week. And Hindustan Zinc has offered $3 billion to buy its parent’s international zinc assets, a deal the government has vehemently opposed.

The big cash payments are also coming at a time of moderating commodity prices. Moody’s expects Vedanta Ltd.’s consolidated adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) will be $4.5 billion to $4.8 billion during the 2024 fiscal year, down from $6.4 billion in fiscal 2022.
Riaz Haq said…
Adani’s business empire may or may not turn out to be the largest con in corporate history. But far greater dangers to civic morality, let alone democracy and global peace, are posed by those peddling the gigantic hoax of Modi’s India. Pankaj Mishra


https://www.lrb.co.uk/the-paper/v45/n08/pankaj-mishra/the-big-con


Modi has counted on sympathetic journalists and financial speculators in the West to cast a seductive veil over his version of political economy, environmental activism and history. ‘I’d bet on Modi to transform India, all of it, including the newly integrated Kashmir region,’ Roger Cohen of the New York Times wrote in 2019 after Modi annulled the special constitutional status of India’s only Muslim-majority state and imposed a months-long curfew. The CEO of McKinsey recently said that we may be living in ‘India’s century’. Praising Modi for ‘implementing policies that have modernised India and supported its growth’, the economist and investor Nouriel Roubini described the country as a ‘vibrant democracy’. But it is becoming harder to evade the bleak reality that, despoiled by a venal, inept and tyrannical regime, ‘India is broken’ – the title of a disturbing new book by the economic historian Ashoka Mody.

The number of Indians who sleep hungry rose from 190 million in 2018 to 350 million in 2022, and malnutrition and malnourishment killed nearly two-thirds of the children who died under the age of five last year. At the same time, Modi’s cronies have flourished. The Economist estimates that the share of billionaire wealth in India derived from cronyism has risen from 29 per cent to 43 per cent in six years. According to a recent Oxfam report, India’s richest 1 per cent owned more than 40.5 per cent of its total wealth in 2021 – a statistic that the notorious oligarchies of Russia and Latin America never came close to matching. The new Indian plutocracy owes its swift ascent to Modi, and he has audaciously clarified the quid pro quo. Under the ‘electoral bond’ scheme he introduced in 2017, any business or special interest group can give unlimited sums of money to his party while keeping the transaction hidden from public scrutiny.

Modi also ensures his hegemony by forging a public sphere in which sycophancy is rewarded and dissent harshly punished. Adani last year took over NDTV, a television news channel that had displayed a rare immunity to hate speech, fake news and conspiracy theories. Human Rights Watch has detailed a broad onslaught on democratic rights: ‘the Hindu nationalist Bharatiya Janata Party (BJP)-led government used abusive and discriminatory policies to repress Muslims and other minorities’ and ‘arrested activists, journalists and other critics of the government on politically motivated criminal charges, including of terrorism’. Last month, as the BJP’s official spokesperson denounced the BBC as ‘the most corrupt organisation in the world’, tax officials launched a sixty-hour raid on the broadcaster’s Indian offices in apparent retaliation for a two-part documentary on Modi’s role in anti-Muslim violence.

Also last month, the opposition leader Rahul Gandhi was expelled from parliament to put a stop to his persistent questions about Modi’s relationship with Adani. Such actions are at last provoking closer international scrutiny of what Modi calls the ‘mother of democracy’, though they haven’t come as a shock to those who have long known about Modi’s lifelong allegiance to Rashtriya​ Swayamsevak Sangh, an organisation that was explicitly inspired by European fascist movements and culpable in the assassination of Mohandas Gandhi in 1948.


Riaz Haq said…
This will blow your mind away! If life gives you a chance to become Yogi, be Swami Harshanand and not Adityanath. See the clarity in Swami’s thoughts and his love for inclusive India. We spoke to him at the peak of movement at Singhu border. This is a tribute to him now that Farm Laws have been repealed.

https://youtu.be/v3x-vpSSwzE

Swami Harshanand: "Modi is a hard core criminal. He should not be PM of India. He should be in jail. It's NAG company (Narendra Amit Gautam) ruling India. He did his MA before his BA. He's a madari (street entertainer). We don't know anyone who went to school or college with him"

Riaz Haq said…
#Indian court acquits 69 people of murder of 11 #Muslims during 2002 #Gujarat riots, overseen by current PM #Modi who was Chief Minister of Gujarat State. Former minister from ruling #BJP party among Hindus acquitted of killings in city of #Ahmedabad https://www.theguardian.com/world/2023/apr/20/indian-court-acquits-69-people-of-of-11-muslims-during-2002-gujarat-riots?CMP=share_btn_tw

The case related to the deaths of 11 Muslims who were killed after their homes in the city of Ahmedabad were set alight by Hindu mobs who rampaged through the streets during communal riots that took place in February 2002. According to an investigation into the attack afterwards, “there was no police help received by the Muslims and they were simply at the mercy of the miscreants”.

Thursday’s verdict by the special court dealt another blow for those still fighting for justice for the Gujarat riots. Over the past two decades, the state has been accused of protecting alleged Hindu perpetrators – including those who now hold some of the most powerful political offices in the country – as well as obstructing justice, intimidating Muslim victims and recently releasing some of the few who had been convicted of rape and violence against Muslims in the riots.

Shamshad Pathan, who represented the victims, said they would challenge the court’s decision in a higher court. “Justice has eluded the victims once again,” he said.

The Gujarat riots began after Muslims were suspected of setting alight a train carriage carrying Hindu pilgrims, sparking revenge attacks by Hindu groups in what became one of the worst outbreaks of religious bloodshed in India’s post-independence history. Officially about 1,000 people died in the violence, mostly Muslims, but civil society groups say the number was much higher.

India’s current prime minister, Narendra Modi, who leads the Hindu nationalist BJP government, was chief minister of Gujarat at the time and was accused of complicity in the bloodshed by allowing the Hindu groups to carry out the revenge attacks and encouraging police and authorities not to intervene to stop the violence. Modi denies any role and a supreme court panel found there was not enough evidence to prosecute him.

In this particular case, 86 Hindus were accused but 17 had died during the trial. Among those acquitted was Maya Kodnani, a former minister for Modi, who was a lawmaker at the time of the riots. She was also an accused in a case relating to the murder of 97 people during the riots and was convicted but later cleared by a higher court.

Those involved in rightwing Hindu vigilante groups Bajrang Dal and Vishwa Hindu Parishad, which both have close links to them BJP, were also among the accused cleared of charges. As the verdict was announced, cries of “Jai Sri Ram”, a Hindu religious greeting that has been increasingly co-opted and weaponised by Hindu nationalists as a battle cry, were shouted outside the court.

“We have been saying from the first day that they were framed,” said the defence lawyer Chetan Shah. “Some of the accused were not present at the scene on the day of the incident.”

The acquittal of the 69 comes after the Gujarat government, which is still ruled by the BJP, recently decided to give early release to 11 Hindu convicts who had been sentenced to life imprisonment for the gang-rape of a Muslim woman and the murder of members of her family, one of the few convictions successfully made in the Gujarat riots.


Riaz Haq said…
Indian opposition party spokesman arrested for mocking Modi

https://www.washingtonpost.com/world/2023/02/23/pawan-khera-arrested-india-modi/

Last week, the spokesman for the opposition Indian National Congress sat before television cameras and demanded a probe into Gautam Adani, an ally to Prime Minister Narendra Modi and business tycoon who has been at the center of an international controversy involving allegations of fraud.

Why has there been no investigation by the government led by “Narendra Gautamdas Modi?” asked Pawan Khera, who wryly swapped Modi’s patronymic middle name Damodardas with “Gautamdas” — implying the billionaire was so influential, he might as well be the prime minister’s father.

Khera glanced at his supporters, chuckled and claimed it was a slip of the tongue. But for many Modi supporters, the dig was neither accidental nor excusable.

As Khera traveled to his party’s national convention on Thursday, he was arrested and police escorted him off a plane at New Delhi’s airport on suspicion of a bevy of crimes including defaming Modi, insulting the Indian leader’s father, promoting enmity between groups, and criminal conspiracy.

Khera was released on bail seven hours later, after the Supreme Court intervened in the case. But the detention of an opposition leader, however brief, dominated national news and reverberated through Indian politics, offering the newest example of how those who oppose the Indian leadership face increasingly swift and heavy-handed retribution.

“The brazen misuse of the police force to lodge baseless cases against India’s main opposition and its leaders is an attempt to scare and threaten us,” said Supriya Shrinate, a Congress spokesperson who was traveling with Khera at the time of his arrest.

In a series of statements, the Congress party denounced Khera’s seizure as “undemocratic” and “dictatorial.”

Earlier this month, Indian tax officials spent three days rifling through the Delhi and Mumbai offices of the BBC and cloning some employees’ phones. The move came after the BBC aired a documentary critical of Modi’s handling of a 2002 sectarian riot.

Although tax officials said their search yielded evidence of financial irregularities, members of Modi’s Hindu nationalist Bharatiya Janata Party (BJP) openly described the tax raid as a response to what they said was the BBC’s record of airing propaganda attacking India.

Before Khera was seized, BJP officials similarly warned that he would face consequences. From Amit Shah, the powerful home minister, to local-level activists, BJP officials issued a flurry of statements condemning the Congress spokesman for what they argued was a low blow.

In a country where class and caste identities often represent powerful forces that mobilize voters and rouse passions, Modi and his supporters have often highlighted his humble roots — rising from assisting his father, Damodardas, at his tea stall to becoming India’s top elected leader — as a testament to his hard-working persona and populist bona fides.

By making a joke that touched on Modi’s parentage, Khera crossed a line, Modi’s allies said.

“Make no mistake- pathetic remarks by courtier Pawan Khera on PM’s father have blessings of the top levels of Congress, which is full of entitlement and disdain against a person of humble origins being PM,” Himanta Biswa Sarma, a member of Modi’s party and the leader of Assam state, said on Twitter on Monday, days before Khera’s arrest. “India will not forget or forgive these horrible remarks.”
Riaz Haq said…
In Modi’s India, hatred toward Muslims is being inflamed by authorities

By Rana Ayyub


https://www.washingtonpost.com/opinions/2023/05/11/modi-india-muslims-hatred-incitement/

In just the past four months, Mumbai and adjoining cities in the state of Maharashtra witnessed 50 anti-Muslim hate rallies attended by thousands of Hindus, often led and participated in by leaders of the BJP. I have attended four such rallies all across western India.

I saw vast crowds, from young children to 80-year-olds marching in the streets, expressing Hindu akrosh (Hindu rage), calling for “termites” and “bearded traitors” — all terms for Muslims in Modi’s India — to be wiped from the face of the country. I saw young women dressed in saffron performing traditional folk dances, holding placards asking Muslims to chose between “Pakistan or Qabristan” (Pakistan or the graveyard).

None of this has been spontaneous. Modi himself has been criticized for failing to take responsibility to stop the 2002 riots in Gujarat that killed more than 1,000 people while he was chief minister there — and even for inflaming passions in the run-up to the massacres.


Members of the BJP have continued to stoke hatred and intercommunal tensions since then. In but one recent example, Devendra Fadnavis, deputy chief minister of Maharashtra, held a rally last month in Ayodhya, near where a Hindu mob famously demolished the iconic Babri mosque in 1992. Modi’s government is planning to consecrate a new Hindu temple on the same site ahead of the 2024 general elections. Fadnavis was there to drive the point home. “Whether you [say it out loud] or not,” he said before a crowd, “the fact is India has a Hindu majority. And in that sense, it is already a Hindu rashtra (state).”

Last month, another provincial minister of the Modi government, who heads the northern state of Uttarakhand, stated that the Modi government would not tolerate “land jihad” — a dangerous dog-whistle to extremists who believe that Muslim immigrants are buying up land to displace the Hindu majority.

The poisonous rhetoric is having an effect. Shortly after these speeches, during celebrations commemorating the birth of Lord Rama, multiple attacks took place all over the country. The most prominent attack saw about 1,000 Hindu rioters set fire to a century-old Muslim religious school in the northern state of Bihar. The school’s library was burned down.


The dangerous provocations continue. “Tolerant Muslims can be counted on fingers. Their numbers are not even in thousands,” Satya Pal Singh Baghel, Modi’s minister of state for law and justice said at a rally this week. “Even that is a tactic. It is to stay in public life with a mask.” Meanwhile, Modi was praising an extremely Islamophobic new film at a rally ahead of local elections this month.


--------


As foreign dignitaries and celebrities continue to visit India ahead of the G-20 summit, they must not turn a blind eye to what is happening. As Zendaya, Gigi Hadid, Tom Holland and Penélope Cruz flocked to Mumbai for the opening of a major new cultural center, Hindu mobs danced to music glorifying the extermination of Muslims, brandishing swords outside mosques. And around the time that Modi welcomed the Australian, Japanese and Italian prime ministers and U.S. Secretary of State Antony Blinken, three Muslims were reportedly lynched.

Modi is making the case that he is an irreplaceable global leader who holds the key to world peace. Western leaders are looking to him as a partner to stand firm against a rising China and to push back on Russia’s naked aggression in Ukraine. Never before in his career of Hindu nationalist politics has Modi found himself more emboldened. It’s unconscionable that the international community remains silent in the face of what is going on.
Riaz Haq said…
Last week’s stellar revival in Adani Group stocks has helped India reclaim its position among the world’s five largest stock markets.



https://qz.com/adani-put-india-back-in-top-five-stock-markets-list-1850484425



India lost its fifth position to France after the US-based Hindenburg Research in January, accused the country’s ports-to-power conglomerate Adani Group of “brazen stock manipulation” and “accounting fraud,” Bloomberg reported today (May 29). The allegations triggered a sell-off in Adani stocks, dragging the indices sharply lower.



However, as of May 26, stock market capitalization stood at $3.3 trillion in India, driven by foreign fund inflows into Indian shares—and a sharp recovery in Adani stocks. 

Foreign investors bought shares worth $4.5 billion in May so far, a little more than a two-fold increase from last month, according to India’s National Securities Depository. Adani’s listed entities added around $15 billion to their market value last week, recovering some of their post-Hindenburg losses.

Now France has been pushed out of the top-five list again after the country’s stock indices lost more than $100 billion in market value last week. This was caused by a sell-off in shares of luxury goods companies such as LVMH Moet Hennessy Louis Vuitton and Vivendi, due to fears of a slowdown in China and the US.


Investors are choosing India over China
India’s prospect as one of the world’s fastest-growing economies is alluring. 

Rival China, on the other hand, seems to have taken a backseat due to a stuttering economy. Beijing’s isolationist Covid-19 policies, turmoil in its real estate industry, and a harsh anti-trust campaign against the country’s valuable tech firms have crushed sentiments for Chinese assets, economists say.

Mark Mobius, founder of Mobius Capital Partners and a market expert, also sees India as a viable alternative. “You’ve got a billion people (Indians), they can do the same thing that the Chinese do. They can do the same kind of manufacturing and so forth,” Mobius told Fox Business in March.


Last week, Christopher Wood, strategist at Jefferies Financial Group, increased the weight of Indian stocks in his Asia Pacific portfolio, excluding Japan, Bloomberg reported. This reflects the dismay among investors when it comes to the Chinese stock market.
Riaz Haq said…
Prashant Bhushan
@pbhushan1
"Indian govt told Twitter to black out farmers protests&tweets by journalists critical of the govt. Threatened to shut Twitter down in India&raid the homes of Twitter employees, which they did. And India is supposed to be a democratic country!": Jack Dorsey, former CEO of Twitter

https://twitter.com/pbhushan1/status/1668351603433168924?s=20
Riaz Haq said…
Modi’s Vision for India Rests On Six Giant Companies


https://www.wsj.com/articles/modi-india-economy-reliance-industries-adani-group-tata-d2c4f89e

Conglomerates are executing projects with a scale and speed that have eluded India in the past. ‘Era of great concentration.’


Prime Minister Narendra Modi says this is India’s decade. That claim rests heavily on a handful of dominant conglomerates.

Increasingly aligned with Modi’s priorities, the roughly half-dozen mega-firms—which include Reliance Industries and Adani Group, helmed by two of Asia’s richest tycoons—have the ability to raise vast sums of capital, and the experience and political connections to navigate India’s byzantine bureaucracy. Capitalizing on government subsidies and privatization plans, they are executing projects with a scale and speed that have eluded India in the past.

Among their ventures: A new airport for Mumbai, designed by the firm founded by the late Iraqi-British architect Zaha Hadid to look like a lotus flower, which is scheduled to start opening next year after the Adani Group took it over. When completed, it’s expected to connect to high-speed rail and handle 90 million passengers annually—only slightly fewer than Atlanta’s main airport, the world’s busiest, last year.

After spending more than $45 billion to build out telecommunications networks, Reliance Industries—a petrochemicals, textiles and retail juggernaut—is constructing factories to make solar panels and batteries for energy storage to position India as a credible alternative to China. It has pledged $75 billion in green-energy spending over the next 15 years.

The 155-year-old Tata Group, which took control of the formerly state-owned Air India last year, recently placed one of the largest orders in aviation history for 470 new aircraft. The salt-to-steel-to-software behemoth, which owns British automaker Jaguar Land Rover, is forging ahead with producing electric vehicles, military transport aircraft, smartphones and telecom hardware, with plans to invest $90 billion in India over five years.

Half a dozen conglomerates now control or have major stakes in 25% of India’s port capacity, 45% of cement production, a third of steel making, nearly 60% of all telecom subscriptions, and more than 45% of coal imports. An analysis by the Center for Monitoring Indian Economy, a research firm, shows that a quarter of all new investment proposals by private companies since 2014 have come from the companies.

“This is the period where it’s not the mad rush of entrepreneurs going out to build new capacities, to become great entrepreneurs—this is the era of great concentration,” said Mahesh Vyas, CMIE’s managing director.

Riaz Haq said…
Modi’s Vision for India Rests On Six Giant Companies


https://www.wsj.com/articles/modi-india-economy-reliance-industries-adani-group-tata-d2c4f89e



Is this good for India, especially as it seeks to compete with China? The evidence is mixed. The mammoth firms can lead large breakthrough projects, but rising industrial concentration can also stifle competition and leave India’s plans vulnerable without broader private investment.

“It’s no longer that they’re taking the place of large public-sector firms, they’re now actually expanding at the expense of other private-sector firms,” said Viral Acharya, a former deputy governor of India’s central bank.

Recent research by Acharya, in a Brookings Institution paper, shows the largest conglomerates have since 2015 rapidly grown their market share, giving them greater power over prices for goods and services they sell. Prices have been rising faster than costs in some industries they dominate, such as cement, his research shows.

“People don’t see a point in entering any space where these big corporations are already,” said Rohit Chandra, an assistant professor at the Indian Institute of Technology—Delhi’s School of Public Policy. “You don’t want just a small group of companies winning everything over and over again.”

Together, the firms’ market capitalizations increased an average of 386% in the decade ending in December, more than double the broader market’s growth. Mukesh Ambani, who runs Reliance, is Asia’s wealthiest man. Beyoncé performed at his daughter’s wedding celebrations in 2018.

Gautam Adani, chairman of the Adani Group, became one of Asia’s wealthiest people, though his net worth has plunged this year.


The Adani Group’s tumultuous year so far exemplifies the danger of relying on a small group of conglomerates. A U.S. short seller in January targeted the energy and infrastructure business with allegations of stock manipulation and accounting fraud, leading Adani companies to lose tens of billions of dollars in market value.

The turmoil cast a cloud over the enterprise’s future expansion as it pays down debt to reassure investors. France’s TotalEnergies paused plans to partner with Adani to produce environmentally-friendly green hydrogen, saying in February the Adani Group “has other things to worry about.”

Adani Group has denied allegations that it committed fraud or stock manipulation. The company says it’s still expanding, including plans to redevelop Dharavi, a Mumbai slum featured in the 2008 film “Slumdog Millionaire.”

Academics and economists refer to the firms as “national champions,” a term that’s also been used to describe Chinese state-owned companies and South Korea’s private-sector chaebols. With state backing and coordination, the chaebols helped South Korea industrialize and turned it into an export powerhouse.

India’s model is shaping up to be a variant of the national-champions strategy, said Nouriel Roubini, an economist and emeritus professor at New York University. One difference with South Korea, he said, is that chaebols were nurtured by the state to be internationally competitive, while Indian companies are largely domestic giants.

The Modi government says it isn’t emulating the chaebol model. “I don’t know if Korea gave special dispensation to the chaebols, but in India, everybody competes on an equal footing,” Indian Commerce Minister Piyush Goyal said in an interview.

He said the conglomerates’ advantage comes from the fact that they have a legacy in India, people skills and managerial talent because of their size. “But other than that, all our projects are through transparent bidding mechanisms, and everybody has to compete to be able to get that business,” he said.

Riaz Haq said…
Modi’s Vision for India Rests On Six Giant Companies


https://www.wsj.com/articles/modi-india-economy-reliance-industries-adani-group-tata-d2c4f89e


Modi’s supporters say his administration is seeking to partner with the private sector at large, not specific companies. Government policies, they say, have attracted multinationals such as Apple, which is diversifying its supply chains outside China, while also spawning an ecosystem for startups. On a visit to the U.S. this week, Modi is poised to strengthen defense and economic ties between the U.S. and India.

Harish Damodaran, an editor at the independent Indian Express newspaper and author of books on business, uses the term “conglomerate capitalism” to describe the country’s corporate landscape. While the government doesn’t typically direct the companies to make particular investments, he says the centralization of political power under Modi has led to a shift in their favor.

The firms find it easier to deal with a single power center in New Delhi rather than the patchwork of regional political heavyweights that flourished before Modi’s rise, and are aligning their strategies with his goals, he said.

Adani, who has a longstanding relationship with Modi, emerged as a key infrastructure builder over the past decade. His industrial group, India’s largest private port operator, controls a string of seaports and terminals. It is building highways, power-transmission lines and networks to supply natural gas, and modernizing airports that were previously state-run.

An Adani spokesman said the group has created a successful template for infrastructure development that draws on 20,000 vendor companies. A large country like India isn’t dependent on any one conglomerate or group of companies, the spokesman said.

The Tata Group didn’t respond to requests for comment. A Reliance spokesman said its expertise in executing large projects, including the world’s largest oil refinery in Modi’s home state of Gujarat, has benefited India. Reliance executives say it doesn’t receive special treatment from New Delhi, but that Modi’s goals and the goals of Ambani, Reliance’s chairman, overlap.

Reliance’s telecom venture shows what deep-pocketed conglomerates can do—and the potential pitfalls.

In 2010, before Modi became prime minister, Ambani set out to build India’s first 4G, or fourth generation, mobile network, a radical departure from Reliance’s main businesses at the time. Incumbent telecom providers such as Bharti Airtel and Vodafone Group were mostly focused on 3G. Average data prices in India at the time were among the world’s highest.

Launching in 2016, Reliance’s service, called Jio, ran advertisements on newspaper front pages with its blue logo, and below it a photo of Modi, who was elected two years earlier. “Dedicated to India and 1.2 billion Indians,” the ads said. After critics complained about what they called the inappropriate use of Modi’s image, the prime minister’s office said it hadn’t granted Jio permission, and Jio apologized.

Jio initially offered free voice calls and text messages. Unlimited internet data was free for the first six months and after that cost consumers a quarter of the industry average.

The result was a colossal data binge, with hundreds of millions of people getting online for the first time. It also caused a price war with rivals that put many out of business and collapsed competition.

Jio’s subscriptions grew rapidly, and now stand at 430 million, making it the top player. It has attracted billions of dollars of investment from Facebook parent Meta Platforms, Alphabet’s Google, and other investors.

As price wars dragged on, Jio’s rivals—who also faced other regulatory and judicial setbacks—warned that unsustainably low prices were pushing the heavily-indebted industry toward a crisis. India’s government had to step in with a relief package in 2021 that temporarily froze payments the companies must make to New Delhi for using airwaves, among other steps.

Riaz Haq said…
Modi’s Vision for India Rests On Six Giant Companies


https://www.wsj.com/articles/modi-india-economy-reliance-industries-adani-group-tata-d2c4f89e



Reliance is expanding further. Last year it spent about $11 billion, more than any other carrier, on 5G spectrum. It’s also making a push into retail with an e-commerce platform, JioMart, which competes against Amazon.com and Walmart’s Flipkart.

JioMart caused a backlash among small Indian businesses that have long controlled distribution of goods such as soap and packaged snacks from manufacturers to neighborhood stores.

JioMart began selling consumer goods to mom-and-pop stores at prices below what it cost these middlemen, said Dhairyashil Patil, president of the distributors’ federation. The middlemen, numbering around half a million, rapidly lost business, Patil said.

“The modus operandi of JioMart is creating a monopoly,” he said. “The way to create a monopoly in a market is to give heavy discounts…kick out the competition from the market and then rule.”

Patil says protests and negotiations with manufacturers have stabilized prices, but distributors are monitoring JioMart’s practices. A Reliance spokesman said the company is focused on benefiting consumers.

Other industries have seen the number of companies capable of executing big-ticket projects shrink over the past decade. Many took on too much debt and went bankrupt, or were bought by the heavyweights.

Adani Group earned a reputation as an aggressive bidder for government contracts and concessions. After authorities in 2018 moved to privatize the operation of six Indian airports, the company, with no experience in managing airports, bid for the right to operate all of them.

Its bids were the highest. It went on to also take the reins of Mumbai’s airport, making Adani one of India’s largest private operators of airports, a business it entered in 2019.

“Our strategy is simple,” the airport business’s chief executive, Arun Bansal, said recently. “To create scale.”
Riaz Haq said…
72% of MSMEs stagnant since past 5 years: Survey | The Indian Express


https://indianexpress.com/article/business/72-percent-of-msmes-stagnant-since-past-5-years-survey-8447589/

Over three-fourth of the micro, small and medium enterprises (MSMEs) are of the view that their business remained either stagnant or decreased or wound up during the last five years, a survey said. The survey by industry body Consortium of Indian Associations of 1,08,500 entrepreneurs also stated that 76 per cent of the respondents are not making profit and access to bank finance remains a big issue.

“During the last 5 years, the performance of 72% of the respondents is either stagnant or
decreasing or stopped or wound up. Only 28% of the respondents have confirmed that they are growing. This is a warning sign. 76% of the respondents have said they are not making a profit,” it said.

--------------


Jawhar Sircar
@jawharsircar
Modi’s economics —
where Demonetisation destroys MSMEs —
who provide 90% of jobs in India.
Corporates, esp Cronies make profit —
but no jobs are created.
Low tax helps corporate — obviously, nothing comes free —
which may explain BJP’s money power and godi media support

https://twitter.com/jawharsircar/status/1682747158020374528?s=20

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