Thames Water still using dowsing rods to detect leaks despite evidence they don’t work

John Dunne
Mon, 30 January 2023 

Thames Water engineers working on a leak in Holloway, north London. (PA)

Thames Water is still using the ancient dowsing method to hunt for leaks, despite scientists saying it doesn’t work.

The company, which services nearly 15million homes, has admitted some of their engineers continue to use dowsing rods in their jobs.

The method, which dates back to the 16th century, involves someone seeking water holding two L-shaped or one Y-shaped rod in front of them, which is then said to twitch or cross if there is water underground.
THEY HAVE TO BE WILLOW
Most water companies were still using dowsing until 2017 when it was dropped after scientists concluded it did not work.

Water reglator Ofwat has advised water firms to stop wasting money on the method which has been dismissed by experts as no better than guesswork.

Ten of the UK’s 12 water companies confirmed their engineers used the method in 2017, compared to just two in 2023.

Thames Water, which loses millions of litres of water in leaks every day, confirmed that their engineers can carry dowsing rods, with one of its workers telling New Scientist they are used to verify or ‘narrow down’ results.

Lloyd Butter told the publication: “Some people they work for, some people they don’t. If they work for you, you come to trust it.

“People are sceptical of it, and I was sceptical when I first saw it. I started using them because I saw someone else use them and I have found leaks.”

Dowsing has been branded ‘witchcraft’.

A Thames Water spokesperson said: “Finding and fixing leaks is our top priority, and we use a range of tools to do this. We’re using innovative AI technology which enable us to detect and fix leaks before they become visible, along with traditional tools.“The onboarding tool box we provide to engineers contains a wide range of kit including: correlators; ground microphones; valve keys; and listening sticks. We don’t provide dowsing rods as standard issue, however some engineers may choose to use their own to help to narrow down results from other leak detecting equipment in particularly rural areas.“We also have an extensive capital programme to help us fix more leaks in the future. In the next 3 years we will spend over £55m installing dynamic pressure management helping to modulate pressure across our network for varying demands, helping reduce leakage. And in the next 3 years we will spend close to £200m on replacing water mains.“We’re determined to drastically reduce the amount of water that escapes from our pipe network to help protect customer supplies for now and future generations. We are repairing over 1,100 leaks per week, whether they are visible or hidden below ground.”

Severn Trent, which supplies homes across the Midlands and Wales, said that while some of its engineers might have dowsing rods with them, it is not company policy to use them.

The firm claims to use satellite and drone technology, as well as acoustic listening devices to find leaks before they become an issue.

A spokesperson for Severn Trent said: “We do not consider dowsing rods to be an effective way of finding leaks and as such we don’t issue them to engineers.

“Instead, we invest in electronic mapping systems and an array of cutting-edge technologies to react quickly when bursts happen.

“Our teams are constantly monitoring the network, checking for flow rate and pressure that may indicate leaks.

“Their expertise, combined with the technology we use, means we manage to detect 60% of leaks before they become an issue for the public.”

U.S. EPA to block Pebble Mine copper/gold mine project in Alaska

Jan 30 (Reuters) -

The U.S. Environmental Protection Agency plans to take steps on Tuesday to block Northern Dynasty Minerals Ltd's proposed Pebble copper and gold mining project in Alaska by preventing the company from storing mine waste in the state's vast watershed.

The move, which had been expected, would be the second in less than a week by President Joe Biden's administration against a proposed domestic source of copper, with officials increasingly calling for the protection of sensitive ecologies even if they contain metals needed for the green energy transition.

The proposed Pebble mine, which would tap one of the world's largest copper and gold deposits, would have "unacceptable and adverse effects on certain salmon fishery areas" in Alaska's Bristol Bay, the agency plans to announce on Tuesday in a step known as a final determination under the U.S. Clean Water Act.

Vancouver, British Colombia-based Northern Dynasty said it will comment after it has seen the EPA's final determination.

The EPA's move also would prevent future development of the Pebble deposit if this would cause the same or more harm to the environment as the existing mine plan.

The project has been through a roller coaster of regulations for the past 15 years. Former U.S. President Barack Obama opposed the project, and his successor Donald Trump ultimately did, too, after deciding it was too risky. Biden has long opposed the project and took steps upon
taking office in 2021 to permanently protect Bristol Bay.

Environmentalists cheered the news. "We're thrilled to see the EPA fulfill it's commitment to the people of Alaska and to provide enduring protection for Bristol Bay, its economy, its salmon and its people from the dangerous and destructive Pebble Mine," said Bonnie Gestring of Earthworks, a conservation group.

Shares of Northern Dynasty fell 1.5% to close at C$0.32 ($0.2391) in Toronto.

($1 = 1.3384 Canadian dollars) (Reporting by Ernest Scheyder, Valerie Volcovici and Nichola Groom; Editing by Jonathan Oatis and David Gregorio)

ALIENATION

A 31-year-old vlogged her job search on TikTok after she got laid off from Big Tech: ‘I’ve never felt like more of a loser in my life.’

Alicia Adamczyk
Sun, January 29, 2023 at 6:00 AM MST·6 min read

In This Economy? is a Fortune series exploring how people are getting by today, from buying a home to paying down debt to cashing out crypto. We want to hear from readers about how they are maneuvering their finances, careers, and lifestyles in 2023. Email reporter Alicia Adamczyk with your story.

Last November, Jordan Gibbs headed into the office for what she thought would be just another routine workday. For a while it was: There were meetings to go to, emails to respond to, and coworkers to make small talk with.

Then the world stopped. Gibbs received an email telling her she was being let go, effective immediately. She had four hours before she lost access to her work computer.

"I just sat there in shock for the first hour," Gibbs, 31, tells Fortune. "It was surreal."

Gibbs worked in human resources at Lyft for just shy of four years. She was part of what she considers one of the first waves of tech layoffs last year, when the Lyft cut 13% of its staff.

Though it didn't feel like it at the time, Gibbs now considers getting laid off in early November a blessing. It allowed her to start looking for a new job before the current "bloodbath" started, she says. Since the start of the year, more than 210 tech companies have laid off over 68,000 employees (as of Friday, Jan. 27), according Layoffs.fyi, which tracks job cuts in the industry.

Not that the search process to find a new role was exactly easy. Getting laid off decimated Gibbs's self esteem and made her feel like a failure. She's still working through those feelings.

"I’ve never felt like more of a loser in my life," she says. "It's embarrassing, but I define myself a lot by what I'm able to do for myself. When that tenant of your personality is gone, it’s like, who am I without this job?"

Layoffs are traumatic. Those affected can suffer from anxiety and depression, and their self confidence and self esteem can plummet. Feelings of shame and worthlessness are common. And that's before the financial stress hits. All told, it can take years for someone to recover from a job loss.

By all accounts, Gibbs had exceeded her performance metrics at work. She couldn't figure out why she was the only person on her team who was let go and that bred resentment. At the same time, friends at other companies who were also laid off received more generous severance packages—Gibbs received 10 weeks of pay and the vesting period for her equity was sped up—which compounded her feelings of frustration.

Wallowing in the hurt and anger, she says, is much easier than keeping a positive attitude, especially when there's no specific reason why something is happening to you that you can control. She was also watching job losses pile up across the tech industry, complicating her search process; she lost weight due to all of the stress.

"You go through the dark, disgusting rabbit hole of, 'Why was it me?'" she says. "It’s death by a thousand cuts, the comparison. It became overwhelming. You really let the negative stuff to creep in."

But Gibbs says she's a practical person with bills to pay, which is why she went into recruiting at a tech firm in the first place. Though she allowed herself to cry and binge Real Housewives the day she lost her job, she started making calls and filling out applications the next.

Over the ensuing days, Gibbs applied for 173 jobs. She had 42 interviews—some with multiple people—and received a couple of rejections from positions she was excited about. She vlogged about her job search process on TikTok, growing a small community who cheered her on and held her accountable. Because she was filming her job search, she had to get up every day and do something.

On the 69th day, right before her 10 weeks of severance would technically run out, Gibbs received a job offer making a comparable salary (but less in equity compensation than her previous role) that she accepted. She will no longer be working for a tech company, which is fine by her.

"I'm really grateful for this teaching me humility and resilience," she said in a TikTok video about the search process.

'Finding a job is a full time job'

Gibbs declined to share exact numbers, but said she made well into the six figures at her previous role, between her base salary and equity compensation. She knows being so well-paid is a blessing, but it also restricted what kind of job she was willing to apply for. She wanted to make at least the same base salary, given her expenses.

"It gets very overwhelming forming your life around that salary and then losing that money," she says.

Luckily, Gibbs had prioritized building up her emergency savings before the layoff. She also received the severance as a single lump sum, so she knew how much she had to spend. The financial stress wasn't as acute for her as it is for many facing unemployment.

Still, she experienced many of the indignities familiar to anyone who loses a job. Dealing with New York's unemployment system and COBRA health insurance has made Gibbs a more empathetic person, she says.

"Finding a job is a full time job. Making sure you have your health care, filing for unemployment and doing it every single week…the administrative costs of being unemployed are so mentally taxing," she says. "It’s a very scary thing. The government does not make it easy to understand or get these resources."

She also cut out virtually every non-essential expense, including her coffees, dinners out, trips to the nail salon, and gym membership, and moved moved back in with her parents in California so she could sublet her apartment in New York. She recognizes the privileged position she was in.

The best advice Gibbs has for those currently dealing with a layoff is to embrace help from family, friends, and even strangers, if you can. Her parents let her live at home rent free. Friends sent her $5 for coffee and a spa gift card; others took her out for dinners. A stranger on TikTok offered to send her workwear for her interviews.

But help comes in all different forms, not just financial aid. Gibbs credits some of her success finding a new job so quickly to the words of encouragement she received from people following along her journey.

"You realize it feels like shit now, but it’s going to be okay," she says of having a support network. "Having that little bit of mental peace for even a second helps you get through the next four hours of hell."

This story was originally featured on Fortune.com

CRYPTO CRIMINAL CAPITALI$M TOO
Crypto Exchange Gemini Emphasized FDIC Insurance in Communications With Earn Customers: Report

Jamie Crawley
Mon, January 30, 2023 


Cryptocurrency exchange Gemini reportedly implied to customers that their assets in its interesting-bearing Earn product were safe because they were backed by the Federal Deposit Insurance Corp (FDIC), Axios reported on Monday.

According to the report, Gemini's discussions with customers referred to the FDIC, but appeared to be in reference to the firm's deposits at other banks, as opposed to its own products, a distinction which customers did not seem to understand.

It is against the law for a financial firm to imply that an uninsured product is FDIC-insured.

The New York Department of Financial Services (NYDFS) is investigating Gemini, according to the Axios report.

Gemini had not responded to CoinDesk's request for an official comment on the matter at press time.

The exchange halted withdrawals from its Earn product in November last year amid the fallout from the collapse of fellow exchange FTX.

Around $900 million is estimated to be frozen on the platform as a result. Gemini blamed the halt on a similar freeze at the now-bankrupt crypto lender Genesis, where Gemini has invested its customers' funds. Genesis and CoinDesk are both owned by crypto conglomerate Digital Currency Group.

The FDIC and the NYDFS both declined to comment.

CRYPTO CRIMINAL CAPITALI$M

U.S. says FTX founder Sam Bankman-Fried needs limits on communications, asset access

Mon, January 30, 2023 
By Jonathan Stempel

NEW YORK (Reuters) - The U.S. government on Monday urged a judge to reject Sam Bankman-Fried's claim it went too far by insisting that the indicted founder of the now-bankrupt FTX cryptocurrency exchange be banned from contacting his former colleagues.

In a letter to U.S. District Judge Lewis Kaplan in Manhattan, prosecutors also asked that a bail condition that prevents Bankman-Fried from accessing or transferring assets at FTX and his Alameda Research hedge fund be left in place.

They argued those assets were "vulnerable to exploitation and in need of protection from the defendant."

The requests came two days after Bankman-Fried's lawyers proposed letting their client access crypto assets and continue communicating with most of FTX's and Alameda's estimated 350 employees, some of whom they said could help his defense.

Mark Cohen and Christian Everdell, who represent Bankman-Fried, did not immediately respond to requests for comment. They have until Feb. 1 to address prosecutors' view on accessing assets.

Bankman-Fried, 30, has been free on $250 million bond and confined at his parents' home in California, after pleading not guilty to fraud for allegedly looting billions of customer dollars from FTX.

Prosecutors previously raised concerns about witness tampering after Bankman-Fried on Jan. 15 sent an encrypted message over the Signal app to an FTX affiliate's general counsel, who could testify against him at a trial set to begin in October.

"I would really love to reconnect and see if there's a way for us to have a constructive relationship, use each other as resources when possible, or at least vet things with each other," Bankman-Fried had written.

In Monday's letter, prosecutors called the message an effort to "improperly influence" the general counsel, no matter how benign it might seem.

"The defendant's position of authority with respect to his former employees, combined with his recent outreach to a former employee about the case, raises a sufficient specter of witness tampering," prosecutors said.

Prosecutors also want to ban Bankman-Fried from using apps such as Signal that let users auto-delete messages, and instead have him communicate in text messages, emails and phone calls.

Bankman-Fried's lawyers have said their client was trying simply to provide assistance to the general counsel, and has not been not using the auto-delete feature.

They also proposed that Bankman-Fried not be allowed to talk with select colleagues, including former Alameda chief Caroline Ellison, former FTX technology chief Zixiao "Gary" Wang and former FTX engineering chief Nishad Singh.

Ellison and Wang have pleaded guilty and are cooperating with prosecutors.

(Reporting by Jonathan Stempel in New York; Editing by Anna Driver)

Prosecutors seek to cut off Sam Bankman-Fried’s access to FTX employees amid trial

Anders Hagstrom

FOX NEWS
Sun, January 29, 2023

The Justice Department is seeking to ban former FTX founder Sam Bankman-Fried from contacting any of the company's employees in an effort to protect potential witnesses.

DOJ prosecutors made the request Friday after alleging that Bankman-Fried had spoken with an FTX employee who may serve as a witness, The Wall Street Journal reported. Bankman-Fried faces fraud charges relating to the downfall of FTX late last year.

Prosecutors say Bankman-Fried reached out to the general counsel of FTX's U.S. operation. They reportedly seek an order from the judge mandating that the accused not speak with current or former FTX employees without a lawyer present.

"Potential witnesses have described relevant and incriminating conversations with the defendant that took place on Slack and Signal that have already been autodeleted because of settings implemented at the defendant’s direction," prosecutors wrote in a request.

Sam Bankman-Fried, the founder and chief executive of FTX, in Nassau, Bahamas, on April 26, 2022.

Prosecutors claim Bankman-Fried wrote to FTX general counsel Ryne Miller, saying he "would really love to reconnect and see if there’s a way for us to have a constructive relationship, use each other as resources when possible, or at least vet things with each other."

SAM BANKMAN-FRIED TWEETS AWAY WHILE UNDER HOUSE ARREST

Prosecutors say such a conversation may have led to witness tampering.

"Were the defendant to ‘vet’ his version of relevant events with potential witnesses, that might have the effect of discouraging witnesses from testifying in a manner contrary to the defendant’s narrative," the Justice Department said in the filing.

Bankman-Fried expressed his surprise at prison conditions in an interview with Forbes last week, stating that he had expected the experience to mirror the Shawshank Redemption film.

"I thought that it was going to be like The Shawshank Redemption," he said, going on to lament the lack of internet access.

FTX founder Sam Bankman-Fried leaves Manhattan Federal Court after his arraignment and bail hearings on December 22, 2022 in New York City.

"I didn't realize how much more important than everything else combined internet access is to me, but that was like 80% of the total cost of being in prison, " he said, noting that he would occasionally get access to a newspaper.

Fox News' Julia Musto contributed to this report.

FTX Seeks to Remove Turkish Units From Bankruptcy Case

Jack Schickler
Mon, January 30, 2023 

AYHAN ALTUN


Crypto exchange FTX is seeking to remove its Turkish units from the scope of its bankruptcy case, saying in a Friday court filing that Turkish authorities are unlikely to follow instructions from U.S. courts.

FTX filed for bankruptcy on Nov. 11 in Delaware, and its new owners are attempting to unwind the affairs of as many as 134 entities across the world.

Within days of the bankruptcy filing, Turkish law enforcement announced a probe into FTX's activities, and on Nov. 23, authorities ordered the seizure of virtually all FTX's assets in Turkey, making it fruitless to include them in wider restructuring plans, the new U.S. management said.

“The orders entered by this court do not have legal or practical effect in Turkey, and the debtors have no reason to believe that the Turkish government will comply with this court’s orders,” FTX said in the filing with the U.S. Bankruptcy Court in Delaware. “As a result, the debtors are unable to exercise sufficient control over the affairs of the Turkish debtors in order to comply with their duties under the bankruptcy code.”

The request concerns FTX Turkey, a local exchange 80% owned by parent company FTX Trading Ltd. and SNG Investments, a wholly owned subsidiary of FTX’s affiliated trading arm, Alameda Research. Both are described in the filing as “not strategic” within the corporate group, with assets and activities largely confined to Turkey.

The parent company can still take action under Turkish law, and some Turkish creditors have already started filing private claims in local courts, the filing said. CoinDesk has previously reported that staff often put their paychecks into the company because of their distrust of local banks and depreciation of the lira.

A hearing on the issue is schedule for March 8. Non-U.S. creditors of the exchange, fearing they may be overlooked by U.S. proceedings, have sought to ensure their representation in the case by forming a committee that can intervene on their behalf.

Read more: Turkish Authorities Order Seizure of 'Suspicious' FTX Assets  

BlockFi's Crypto Mining Assets May Be Headed to Market After Bankruptcy Hearing

Jack Schickler
Mon, January 30, 2023 

Scott Olson

Failed crypto lender BlockFi appears on track to sell some assets after a bankruptcy judge in New Jersey expressed approval of the plan as part of Chapter 11 bankruptcy proceedings designed to restore funds to creditors.

Under a proposal put to the bankruptcy court on Monday, bidders for BlockFi's crypto mining assets would have until Feb. 20 to submit bids, with an auction the following week.

“I think it's a workable and certainly an expeditious and efficient process that's contemplated,” Judge Michael Kaplan said, after the U.S. government and a committee representing creditors withdrew their objections. “We'll all keep our fingers crossed that it produces significant results.”

The sale would be the first in a number of potential auctions, BlockFi’s attorneys told the court.

“We've received substantial interest in the market for certain asset packages and we expect to receive even more bids going forward,” Francis Petrie of law firm Kirkland & Ellis said after a Jan. 9 legal filing cited 35 potential counterparties. “Given the practical realities of the debtors’ circumstances, and the current volatility in the cryptocurrency market, we need to act quickly to preserve the value of our assets."
Robinhood

BlockFi’s attempts to get its hands on hundreds of millions of dollars worth of stocks in Robinhood Markets (HOOD), however, have taken a further turn following parallel legal proceedings in Antigua, the New Jersey court was told.

“On January 27, the court in Antigua granted Sam Bankman-Fried's motion to stay the liquidation proceedings,” said Richard Kanowitz of Haynes Boone, also representing BlockFi. “They granted leave to appeal, which he must file within 21 days.”

The 56 million shares, with a current value of around $577 million, are the subject of a complex tussle involving BlockFi, failed crypto exchange FTX, FTX founder Sam Bankman-Fried, the Antigua-based liquidators of the shell company that nominally owned the shares and the U.S. Department of Justice (DOJ).

According to court filings earlier in January, the shares have been seized by the DOJ, which is investigating Bankman-Fried, who has pleaded not guilty to charges including wire fraud. Bankman-Fried has also said he was willing to give the shares to FTX customers, though in court he opposed a related bid by FTX to claim ownership.

Dependent on FTX for a $400 million line of credit, BlockFi filed for Chapter 11 bankruptcy protection on Nov. 28, shortly after FTX did the same. On Friday, Kaplan approved a $10 million BlockFi bonus pot intended to keep staffers from leaving the company.

Read more: BlockFi’s $10M Staff Bonus Package Approved by NJ Bankruptcy Court Judge

Wall Street Giants Spy Opportunities Rising From FTX Ashes

Anna Irrera, Suvashree Ghosh and Yueqi Yang
Mon, January 30, 2023

 


(Bloomberg) -- Bank of New York Mellon Corp. traces its history back to 1784 and Alexander Hamilton. But even this venerable institution is finding the lure of the crypto world too strong to resist.

Despite all that’s gone wrong in the industry, with trillions in losses, spectacular bankruptcies, the arrest of Sam Bankman-Fried — the world’s largest custodian bank and other financial giants are hoping to expand in crypto — not shrink.

Cryptocurrencies are a small part of the sprawling digital-asset universe they’re targeting, betting the “crypto winter” will help them do what they couldn’t quite pull off during the now-forgotten crypto spring: make inroads into key parts of the business once and for all.

They’re pushing ahead with projects in blockchain, the digital scaffolding that logs transactions. They’re expanding offerings in tokenization — the issuance of tokens representing real, mainstream assets like bonds. Another goal is crypto custody, where firms safeguard the assets for clients, even though recent guidance from regulators makes that more costly.

From BNY Mellon — which launched a crypto custody platform one month before Bankman-Fried’s FTX filed for bankruptcy — to mutual-fund giant Fidelity Investments, BlackRock Inc. and Nomura Holdings Inc., members of the Wall Street establishment are planning for a future in digital-assets.

“This will continue to be a focus for us, not so much for crypto, but really the broader opportunity that exists across digital assets and distributed ledger technology,” Robin Vince, chief executive officer at BNY Mellon, said this month on a call discussing earnings. “If anything, the recent events in the crypto market only further highlight the need for trusted regulated providers in the digital-asset space.”

A spokesperson for the company said it believes in the “transformative potential” of blockchain, with its ability to improve accuracy of record-keeping, handling of certain asset types such as real estate and loans, as well as more efficient settlement.

But there are significant hurdles. Regulators, cool on crypto even before FTX’s downfall, will almost certainly become tougher on increased exposure at firms they oversee. And with a downturn looming, banks under pressure to control costs are making job cuts that may scale back their ambitions. Plunging crypto prices and valuations won’t help rekindle investor demand either, although a rebound in token prices this month may signal the worst of the recent chaos is over. After a brutal 2022, Bitcoin is poised for its best January since 2013.

Here’s what firms have planned:

BlackRock

At BlackRock, teams will continue to explore using digital assets in capital-markets offerings, according to a person familiar with the matter. The world’s largest asset manager is focusing on four areas: stablecoins, permissioned — or private — blockchain, tokenization and crypto assets.

Last year, BlackRock struck a partnership with digital-asset exchange Coinbase Global Inc. that would make it easier for institutional investors to manage and trade Bitcoin. A representative for BlackRock declined to comment on its plans.

Goldman Sachs

Goldman Sachs unveiled its digital assets platform in November, with hopes that clients will use the technology to issue financial securities in the form of digital assets in classes such as real estate.

The firm, along with Banco Santander SA and Societe Generale SA, helped the European Investment Bank issue a digital bond last year using blockchain technology. The settlement took a minute, compared to the several days it would normally take, according to Mathew McDermott, Goldman’s global head of digital assets.

“Using this technology allows us to transform the risk profile of a trade,” he said. “It’s not a pipe dream, there is real value.”

Goldman also has a team of seven traders who deal cash-settled crypto derivatives for clients. The crypto desk, which was relaunched during the 2021 virtual-currency rally, allows clients such as investment funds and trading firms to buy and sell cryptocurrency futures, non-deliverable forwards and cash-settled options, as well as the ability to go short or long on some exchange-traded products via the prime business.

JPMorgan

JPMorgan Chase & Co. CEO Jamie Dimon has long lambasted cryptocurrencies. He recently likened crypto tokens to pet rocks and said Bitcoin was “hyped-up fraud.”

But the bank has been active, spending several years developing blockchain-based systems to run traditional financial transactions. It’s running a number of projects from its blockchain division Onyx, including a distributed ledger-based payment network for banks, called Liink. It also has JPM Coin, a token used for payments, and a platform to tokenize traditional assets.

Fidelity Investments

Fidelity Investments plans to expand the types of assets it offers custody for beyond Bitcoin and Ether, though such plans aren’t imminent. The firm will explore offerings around asset staking — a process that allows token holders to lock up their coins and earn yields in return — and lending, according to Fidelity Digital Assets’ Head of Institutional Chris Tyrer. The company has continued its crypto push, hiring an additional 100 people and targeting 500 in the division by the end of the first quarter.

Cboe

Cboe Global Markets Inc. is adding participants to its new digital-assets spot-and-futures trading platform. In November, the company announced that 13 companies had invested in the platform, including trading firms Jane Street, Susquehanna International Group and online brokerage Robinhood Markets Inc.

“Recent events have brought into focus why investors could benefit from a safe, trusted and transparent marketplace,” and some of the investor-protection practices that are standard in regulated markets, said David Howson, president of Cboe Global Markets.

CME Group

After the Chicago-based global exchange group started offering cryptocurrency derivatives more than five years ago, it’s planning to work on new products related to reference rates this year, said Tim McCourt, CME’s global head of equity and FX products.

“We have seen more interest manifested in CME’s offering given our position as a regulated entity,” he said. “It’s becoming more important to more participants in the market, given recent events.”

Even in the days leading up to FTX’s collapse, CME saw a record day of trading in its crypto products, with 207,205 contracts traded on Nov. 8.

TP ICAP Group

TP ICAP Group Plc plans to launch a crypto spot-trading platform this year, after the interdealer broker received regulatory approval. The firm’s digital-asset business is also working with other divisions in the firm to see how it can integrate crypto, with a focus on the buy side.

“This is an opportunity for more traditional financial firms to enter the crypto-asset market and provide services to their clients that have the appropriate governance, segregation of roles and controls,” said Duncan Trenholme, co-head of digital assets at the London-based firm. That’s “something their clients have come to expect across traditional asset classes and will now expect in crypto.”

Societe Generale

The French bank is pressing ahead with its work around security tokens, the digitized versions of existing regulated asset classes, said Didier Lallemand, a managing director for the bank’s venture arm.

“We will see a traditional switch from bond and securities issuance on tokenized securities,” Lallemand said. A harder part of getting blockchain projects off the ground is finding the correct legal and regulatory framework: winning agreement from regulators that a tokenized security issuance can take place, Lallemand said.

StanChart, Nomura

Standard Chartered Plc launched Zodia Markets in 2021, a digital-asset broker and exchange targeting institutional investors. Following the FTX collapse, Zodia doubled its customer pipeline, according to CEO Usman Ahmad.

Zodia is pushing ahead with its growth plans and hasn’t made any changes to its “already extremely stringent” risk parameters since FTX, Ahmad said. “We’ve seen continued momentum and client interest into 2023,” he said.

For Nomura, which launched its crypto arm amid a deep market rout in September, this is the right moment to dive in, said Jez Mohideen, CEO of Nomura’s crypto unit, Laser Digital.

“It’s the best time to build the business because you understand the pain points in the market,” Mohideen said.

State Street

State Street Corp. is continuing initiatives to offer custody of cryptocurrencies. CEO Ronald O’Hanley drew the distinction between cryptocurrencies and other digital assets such as central bank digital currencies, or CBDCs, during an interview at the Davos World Economic Forum this month.

“There is still a bright future for tokenization,” he said. “There’s a lot of central banks thinking about central bank digital currencies — I think that is proceeding forward at pace.”

German Industrial Gas Giant Messer Courts Sovereign Wealth Funds

Aaron Kirchfeld, Eyk Henning and Dinesh Nair
Mon, January 30, 2023



(Bloomberg) -- Messer SE, the German industrial gas maker that’s been controlled by its namesake family for more than a century, is in talks to bring in external investors to raise money for deals.

The company has sounded out sovereign wealth funds including Singapore’s GIC Pte and the Abu Dhabi Investment Authority, as well as EQT AB’s infrastructure arm, according to people familiar with the matter. Messer could use the proceeds to buy full control of a joint venture with CVC Capital Partners, they said.

The joint venture, known as Messer Industries GmbH, owns former Linde assets in North and South America. The business’s equity may be valued at as much as €7 billion ($7.6 billion), some of the people said. It also has about €2 billion in debt on top of that, they said, asking not to be identified because the information is private.

Messer and CVC agreed to create the joint venture in 2018 to buy assets being sold by Linde to secure antitrust approval for its $46 billion merger with Praxair Inc.

Bad Soden-based Messer’s operations have more than 11,000 employees globally and reported €3.5 billion of sales in 2021, according to its website. The company, which focuses on industrial, medical and specialty gases, competes with companies such as Air Liquide SA and Air Products & Chemicals Inc.

Beyond industrial gases, the company also builds cutting systems and gas control equipment. The family shareholders are represented by Chief Executive Officer Stefan Messer, as well as his son Marcel Messer, a management consultant.

Messer has an option to buy out CVC from March, which has triggered the group’s hunt to find funds to pursue a deal, the people said. As part of the original 2018 agreement, both sides agreed on a formula that determines the value of the JV, they said.

Talks with potential investors may not lead to a transaction, according to the people. CVC hasn’t decided whether it wants to sell and also has the option to pursue an IPO of the venture next year, they said.

While buying out the joint venture and bringing on an external investor could pave the way for an IPO of the group down the road, CEO Stefan Messer has repeatedly said he prefers to keep the family-owned company private.

Representatives for ADIA, CVC, GIC, EQT and Messer declined to comment.

If a deal is reached, it could mark the first signs of an improvement in German dealmaking. Mergers and acquisitions in the country are down almost 80% so far this year, after declining nearly a third in 2022, as firms struggle to raise financing amid the risk of a recession and the war in Ukraine.

The Middle East’s sovereign wealth funds, flush with oil revenue, have become a key port of call for companies looking to raise financing. They’re helping Gulf countries diversify their economies and build influence at a time when other sources of capital are drying up.

--With assistance from Jan-Henrik Förster, Kiel Porter and Elffie Chew.

Adani Isn't The First — Elon Musk's Twitter, Nikola And A Crypto Company Have Been Short-Selling Targets For Hindenburg Before

Shivdeep Dhaliwal
Mon, January 30, 2023 



Hindenburg Research LLC is a short seller known for exposing fraud. Currently, it is in the news for its scathing report on India’s Adani Group, accusing it of stock manipulation and accounting fraud.

The Nathan Anderson-founded company sniffs out accounting regularities, iffy management, undisclosed related-party transactions, and other such irregularities, according to its website.

Hindenburg’s latest report on companies headed by Asia’s richest man, Gautam Adani, led to a bloodbath in their shares last week, even after the group offered a point-by-point rebuttal to the short seller’s claims.

This is not the first time Hindenburg has caused such consternation. The New York-based company’s reports and comments have had dramatic results in the past.

See Also: Adani Green, Several Other Group Stocks See Plunge Deepen As Fight With Short Seller Takes 'India Growth Story' Turn

Nikola Fraud: In September 2020, Hindenburg released a report on the electric car maker Nikola Corporation (NASDAQ: NKLA), which had at the time styled itself as a potent emerging rival to Elon Musk–led Tesla.

At the time, Hindenburg said Nikola was “an intricate fraud built on dozens of lies.” It specifically called out a video titled “Nikola One in Motion” which appeared to show a Nikola truck driving down a desert, which the short seller said was actually towed to the top of a hill and released. The end result of the Nikola expose was a victory for short sellers and the unceremonious exit of founder and Executive Chair Trevor Milton. In October 2022, Milton was convicted of fraud. He faces up to 20 years in prison.

Goes Long On Twitter, Pulls A 180º On Musk: In June last year, Hindenburg changed its thesis on Twitter — the social media giant was then an acquisition target by Musk. The change of heart came just as Twitter sued Musk to complete the $44 billion acquisition abandoned by him.

“We have accumulated a significant long position in shares of Twitter. Twitter’s complaint poses a credible threat to Musk’s empire,” tweeted Hindenburg at the time.

See Also: Gautam Adani Falls Below Bill Gates, Warren Buffett On World Rich List Amid Stock Market Rout

Previously, the short seller had said Musk held all the cards in the Twitter situation and that there were multiple factors that suggested that the billionaire was not getting value for the social media platform that he was when he announced his offer.

Riot Blockchain A 'Crypto Clown Car': Hindenburg went after Riot Blockchain (NASDAQ: RIOT) in a series of articles dating back to 2017. The writeups covered suspicious acquisitions that Hindenburg said were designed to benefit insiders.

A CNBC report said Riot’s business was full of many “red flags.” Ultimately, the CEO and Chair of Riot resigned in 2018 after unrelated charges were filed by the U.S. Securities and Exchange Commission, according to a separate report.

Hindenburg disclosed it was short Riot in 2018 in a report titled, “Riot Blockchain: This Crypto Clown Car Continues Hurtling Toward The Abyss.”

This article originally appeared on Benzinga.com

© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

CRIMINAL CAPITALI$M

Billionaire Gautam Adani Calls on India 

for Help to Save His Empire

Adani and his companies are facing accusations of fraud

from a New York short-seller, threatening the group's shares

 and his fortune.

• LUC OLINGA
• JAN 30, 2023

Billionaire Gautam Adani is under siege. 

Since Jan. 24 Asia's richest man has faced serious allegations of fraud, money laundering and price manipulation that threaten to take away much of his fortune.

Indeed, the New York investment firm Hindenburg Research has launched an offensive against one of the largest Indian conglomerates.

"We have uncovered evidence of brazen accounting fraud, stock manipulation and money laundering at Adani, taking place over the course of decades," Hindenburg wrote in a report published on Jan. 24.

"Adani has pulled off this gargantuan feat with the help of enablers in government and a cottage industry of international companies that facilitate these activities."

The report describes a galaxy of shell entities based in tax havens -- the Caribbean, Mauritius and the United Arab Emirates -- controlled by the Adani family.

The short-seller claims that the conglomerate has used shell companies in tax havens to boost its revenue and manipulate the stock market price of its various entities. As a result, the firm shorted stocks of the Adani conglomerate through U.S.-traded bonds and non-Indian-traded derivative instruments. 

This means that Hindenburg Research, a well-known short-seller, is betting on a short-term drop in the prices of these equities.

These accusations come as the Adani empire seeks to attract the general public and foreign institutional investors to a $2.5 billion offering.

'A Calculated Attack on India': Adani

Hindenburg's report caused a stock-market rout for the entities making up the Adani conglomerate on the Mumbai stock exchange. In total, the Adani empire lost $68 billion in market value during the three stock market sessions following the publication of the Hindenburg report. 

Aware that its two first declarations failed to allay the concerns and questions raised by Hindenburg, Adani, 60, has just pulled out the patriotism weapon.

"This is not merely an unwarranted attack on any specific company but a calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India," Adani said in a 413-page report. According to the company, the report answers most of the questions posed by Hindenburg on Jan.29.

In this report, the conglomerate repeatedly says that Hindenburg does not understand how Indian institutions work. It suggests that Hindenburg simply does not understand India. 

The company is reaching for nationalism in the hope of undoubtedly provoking a surge of sympathy among the local population and the authorities. The word "Indian" comes up regularly in Adani's 413 response pages.

"The queries make reckless statements without any evidence whatsoever and purely on unsubstantiated speculations without any understanding of the Indian laws around related parties and related party transactions," Adani said of questions asked by Hindenburg about its governance and alleged malpractices. 

"The assumption that the entities, as stated in the report, are related to Adani listed entities, is imaginary, vague and unsubstantiated and flows only from a lack of understanding by Hindenburg of the Indian laws, regulations and accounting standards," the company also said.

Adani 'Stoked a Nationalist Narrative': Hindenburg

"Hindenburg Research does not appear to have any understanding on matters of Indian law or accounting standards and yet makes claims of entities being undisclosed 'related parties' with no understanding of what constitutes a related party."

In addition to accusations of ignorance of Indian institutions, Adani also does not hesitate to accuse the New York firm of snubbing India.

"Hindenburg deliberately ignores Indian legal processes and regulations in their insinuations against us," Adani said.

The short-seller sensed the strategy.

"Fraud cannot be obfuscated by nationalism or a bloated response that ignores every key allegation we raised," Hindenburg said in a statement. 

Adani Group "predictably tried to lead the focus away from substantive issues and instead stoked a nationalist narrative, claiming our report amounted to a 'calculated attack on India.' In short, the Adani Group has attempted to conflate its meteoric rise and the wealth of its Chairman, Gautam Adani, with the success of India itself."

Adani Group is one of the most valuable companies in India. The firm holds mines, ports and power plants. It owns a dozen commercial ports and is present in coal, electricity and renewable energy. It also has diversified into airports, data centers and defense.

The company also recently entered the cement sector by buying assets of cement manufacturer Holcim  (HCMLY)  in India and is also looking to set up an aluminum factory. 

Adani has grown the group by acquiring companies with debt. 

Last August, the CreditSights subsidiary of Fitch Ratings warned that the Adani conglomerate was "deeply overleveraged" and may "in the worst-case scenario" spiral into a debt trap.

But two weeks later the credit-rating firm said it discovered that it had made "calculation errors" in two of Adani Group's companies. It corrected its report and removed the words "deeply overleveraged."

"CreditSights' views have not changed from its original report and we still maintain that the group's leverage is elevated," CreditSights concluded.

Adani empire tumbles again with stock sale hanging in the balance

Nivrita GANGULY
Tue, 31 January 2023 


Investors dumped more Adani shares on Tuesday, deepening the carnage at India's biggest conglomerate which has already lost around $70 billion in value after allegations of "brazen" corporate fraud.

The latest losses came as a stock sale aimed at raising $2.5 billion was due to close later in the day, with only 21 percent of the offer subscribed by midday, according to the firm.

Founder Gautam Adani, 60, was the world's third-richest person last week but has slipped to eighth position on Forbes' tracker after his personal fortune lost more than $36 billion since.

Shares in Adani Total Gas saw the biggest fall on Tuesday with trading halted for another session after diving 10 percent in the morning.

The natural gas distribution company -- of which France's TotalEnergies owns 37.4 percent -- has lost 45 percent in market value over the last week.

Adani Power and Adani Wilmar also hit their circuit breakers after falling five percent each, while Adani Green Energy traded 2.58 percent lower.

Adani Transmission and Adani Ports inched higher and the flagship Adani Enterprises regained some lost ground, trading 3.5 percent higher.

But the Adani Enterprises shares remained well below the 3,112-3,276 rupees price range set for the Follow-on Public Offer (FPO) -- making them cheaper to buy in the open market.

Abu Dhabi-based International Holding Company (IHC) gave the group a vote of confidence however, saying Monday it would buy 16 percent of the shares on offer, paying $400 million to do so.

This makes up most of the 21 percent that the Indian firm said was subscribed by midday.

- 'Brazen manipulation' -

The slump in Adani's stocks was sparked by a report from US investment group Hindenburg Research that last week alleged a "brazen stock manipulation and accounting fraud scheme over the course of decades".

Adani's conglomerate said it was the victim of a "maliciously mischievous" reputational attack and on Sunday issued a 413-page statement that it said rebutted Hindenburg's claims.

Dubbing Hindenburg the "Madoffs of Manhattan" -- a reference to crooked financier Bernie Madoff -- the statement said the researchers' allegations were "nothing but a lie".

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

Hindenburg said in response to Adani's statement that "India's future is being held back by the Adani Group, which has draped itself in the Indian flag while systematically looting the nation".

It added that Adani's response only included about 30 pages focused on issues related to its report.

ng/stu/axn

Adani Debts Enter Spotlight as Dollar Bond Coupon Deadlines Loom

Ameya Karve, Divya Patil and Finbarr Flynn
Mon, January 30, 2023 

(Bloomberg) -- Scrutiny of the debts of Adani Group companies has intensified following a report by short seller Hindenburg Research, fixing investor attention in the months ahead on a string of bond interest deadlines

The conglomerate, backed by Asia’s richest person, has at least $289 million worth of dollar note coupon payments due in 2023, according to data compiled by Bloomberg. The first deadline is on Thursday, when Adani Ports & Special Economic Zone Ltd. must pay a combined $24.7 million of interest for three bonds.

There’s been no suggestion that the Adani entities would struggle to make these payments, and Adani has flagged interest coverage ratios that show it has the wherewithal to meet such obligations.

But Hindenburg’s report last week alleging “accounting fraud” along with its short position in Adani’s US-traded bonds and non-Indian-traded derivatives has put the debt in the spotlight. Some of the notes have fallen to distressed levels below 70 cents on the dollar that generally show mounting concern about creditworthiness. The securities extended declines Monday after a rebuttal by the Indian conglomerate and as Hindenburg followed with its own response.

Here’s a calendar of the upcoming dollar bond interest payments. While this list isn’t exhaustive, and excludes rupee securities, it gives a picture of some of the key dates that global investors are watching for major entities like Adani Green Energy Ltd., Adani Ports and Adani Transmission Ltd. The yields are based on prices compiled by Bloomberg for the entities’ Reg S notes.

“We believe it could take only one serious liquidity event at a single entity to trigger a negative cascade of events at other group entities which could affect the entire Adani Group,” Hindenburg wrote in its Jan. 24 publication.

Adani Group has said it’s exploring legal action over what it called a “maliciously mischievous, unresearched” report. A spokesman for the Adani Group didn’t immediately have comment about the company’s coupon payments when contacted by Bloomberg on Monday.

When it comes to bond principal repayments, Adani companies have rupee notes maturing this year in the local credit market, where price moves have been more muted. The entities mentioned above don’t have any dollar bond maturities until 2024, when Adani Ports and Adani Green are due to repay a combined $1.9 billion.

Here’s the calendar for some of those dollar note deadlines in coming years:

Already in August, the conglomerate’s financial situation made headlines after CreditSights, a Fitch Group unit, termed it “deeply overleveraged.” Adani Group denied that assessment, saying its companies had progressively reduced their debt load.

A presentation the conglomerate made in September included metrics on its ability to service interest payments that should offer investors some comfort on the looming coupon payments. The interest coverage ratio — Ebitda divided by interest expenses — ranges from about 2 to over 15 times for these entities. Typically, an interest coverage ratio of minimum two times is seen as good by credit assessors.

Broader concerns about longer-term management of the conglomerate’s debt loads, though, persist. In its September presentation, Adani listed leverage ratios for six of its firms. Five of those companies had a ratio that’s higher than the average of firms in India’s Nifty 50 index, according to Bloomberg-compiled data. Adani Total Gas Ltd. was the only one in that group that was lower.

The ratio of net debt to earnings before interest, taxes, depreciation and amortization ranged from 0.7 to 10.3 times for the six entities, compared with the Nifty 50 average of about 1.3 times.

That same report showed total cash at Adani Ports & Special Economic Zone Ltd., which Hindenburg said is “the only listed entity with significant reserves,” stood at about 40% of its net debt. Other members of the group had less favorable ratios.

--With assistance from Caroline Chu, Jacqueline Poh, P R Sanjai and Tasos Vossos.

Adani Rout Hits $68 Billion as Fight With Hindenburg Intensifies

Abhishek Vishnoi, Ishika Mookerjee and Ashutosh Joshi
Mon, January 30, 2023

(Bloomberg) -- Billionaire Gautam Adani’s 413-page attempt to restore confidence in his business empire is falling flat with investors, as stock-market losses deepen and key dollar bonds sink to fresh lows.

Shares of most Adani firms slumped on Monday despite the group’s lengthy weekend rebuttal to allegations from Hindenburg Research that the Indian conglomerate used a web of companies in tax havens to inflate revenue and stock prices even as debt piled up. The three-day selloff has now erased more than $68 billion of market value amid a share sale by Adani’s flagship that was meant to underline the tycoon’s ascension on the global stage.

While the Adani Group has portrayed Hindenburg’s allegations as baseless and an attack against India itself, the saga is reviving longstanding investor concerns about the conglomerate’s corporate governance. It also threatens to weaken broader confidence in India, until recently a top investment destination for Wall Street, and accelerate a nascent shift toward a reopening China.

“Not sure if Adani’s rebuttal is enough to assuage investor concerns. Just because things are disclosed and known does not make them right,” said Brian Freitas, an analyst at Smartkarma. “How does a group that big explain no analyst coverage and no mutual fund holdings?”

Hindenburg published a report last week accusing the Adani group of “brazen” market manipulation and accounting fraud. The wide-ranging allegations of purported corporate malpractice spoke of a web of Adani-family controlled offshore shell entities in tax havens, from the Caribbean, Mauritius and the United Arab Emirates.

Hindenburg said it had taken a short position in Adani’s companies through US-traded bonds and non-Indian-traded derivative instruments. Here’s some of their main allegations:

Identified 38 Mauritius shell entities controlled by Adani’s brother, Vinod Adani, or his close associates plus entities controlled by him in other tax havens.

The offshore shell network seems to be used for earnings manipulation.

Adani Group has previously been the focus of four major government investigations relating to allegations of fraud.

Adani Enterprises and Adani Total Gas Ltd. appear to be audited by a tiny firm, with no current website, only four partners and 11 employees, and which has audited just one other listed firm.

The auditor “hardly seems capable of complex audit work” when Adani Enterprises alone has 156 subsidiaries and many more joint ventures.

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

Hindenburg then said Adani’s rebuttal ignored all its key allegations and was “obfuscated by nationalism.” The conglomerate’s statement failed to specifically answer 62 of Hindenburg’s 88 questions, the short seller said Monday, and conflated the company’s “meteoric rise” and the wealth of Asia’s richest man “with the success of India itself.”

Adani’s stocks were some of the best performers last year not just in the local market, but also on the broader MSCI Asia Pacific Index.

The selloff that began last week broadly continued on Monday, with Adani Total Gas Ltd. and Adani Green Energy Ltd. down as much as 20%. The flagship Adani Enterprises traded volatile, briefly erasing an early gain of as much as 10% before closing up 4.8%.

Still, Adani Enterprises’ shares remain below the floor price set for the follow-on equity sale. The company is seeking to raise 200 billion rupees ($2.5 billion).

Overall subscription for the share offer by Adani Enterprises, which closes on Tuesday, was at just 2% as of 16:27 p.m. in Mumbai on Monday. Retail investors had bid for 4% of the shares on offer to them, while the company’s employees bid for 12% of the shares for their category. The non-institutional part that includes wealthy individuals had been taken up 1%. Institutional investors bid for 4,576 shares, a fraction of the 12.8 million on offer.

While investors in Indian public offerings typically wait until the last day of the sale to place bids, concerns have risen that Hindenburg’s report will hurt sentiment.

There will be no change to the pricing of the additional share sale and it will proceed as scheduled, Adani Group CFO Jugeshinder Singh told news channel CNBC TV 18 in an interview.

‘Turn for Worse’

Meanwhile, a decline in the dollar bonds of the Adani Group companies quickened on Monday. Adani Ports & Special Economic Zone Ltd.’s 2027 note dropped 5 cents, Bloomberg-compiled data show.

Several bonds issued by group companies, including the 2032 note of Adani Ports and Special Economic Zone Ltd., have dropped below the 70-cents-on-the-dollar mark typically considered distressed.

Hindenburg Research’s attack on the Adani Group has also sparked a flurry of bets in the options markets, with a wide divide between those behind the short seller and others predicting a rebound in the shares.

Open interest — a measure of outstanding positions in call and put options — surged as some investors sought protection against the wild swings in the group’s shares.

“The risk-reward for Indian markets has just taken a turn for the worse,” said Charu Chanana, a strategist at Saxo Capital Markets. “Foreign investor confidence has been dented and will take time to repair, so I would be rather cautious. India anyway started this year trading at a premium to other EMs, and the Adani saga has once again questioned whether that is justified.”

--With assistance from Finbarr Flynn, Devidutta Tripathy, Anders Melin, Abhinav Ramnarayan and Bhuma Shrivastava.

Adani Backed by UAE Royals Buying $400 Million in Share Sale

Farah Elbahrawy and Bhuma Shrivastava
Mon, January 30, 2023 

(Bloomberg) --

Abu Dhabi’s International Holding Co. will invest about $400 million in Adani Enterprises Ltd.’s follow-on share sale, voicing confidence in Indian billionaire Gautam Adani’s business empire after almost $70 billion was wiped off its market value.

The funding from IHC, which is controlled by a key member of the emirate’s royal family, will represent about 16% of the offering and follows an almost $2 billion investment in Adani’s companies last year.

“Our interest in Adani Group is driven by our confidence and belief in the fundamentals of Adani Enterprises,” Chief Executive Officer Syed Basar Shueb said. “We see a strong potential for growth from a long-term perspective and added value to our shareholders.”

IHC’s investment comes as Adani seeks to restore trust in his ports-to-power business following a scathing report by US-based short seller Hindenburg Research. The $2.5 billion share sale, scheduled to close Tuesday, was supposed to cement his legacy and open his empire to individual investors and broader India. Instead, he’s had to rely on funds from existing investors expressing their support.

Hindenburg accused the conglomerate of market manipulation, accounting fraud and operating a web of controlled offshore shell entities in tax havens. Adani Group issued a 413-page rebuttal on Sunday, but its efforts to restore confidence appear to be falling flat with many investors, as stock-market losses deepened and key dollar bonds sank to fresh lows.

While Adani Group bashed the allegations, the saga is reviving longstanding investor concerns about the conglomerate’s corporate governance. It also threatens to weaken broader confidence in India, until recently a top investment destination for Wall Street.

Still, IHC — which itself has struggled to entice international investors, some of whom privately expressed concerns about a lack of transparency — is standing by the businessman.

The move builds on an April investment in which Adani Enterprises raised 77 billion rupees ($944 million) by issuing preferential shares to IHC. Adani Green Energy Ltd. and Adani Transmission Ltd. also received 38.5 billion rupees from the Abu Dhabi-based firm.

Investors including Maybank Securities Pte, Abu Dhabi Investment Authority, State Bank of India Employees Pension Fund and Life Insurance Corp. of India also plan to buy stock in Adani’s share sale. Bloomberg News first reported IHC’s interest in the offering last week.

‘Based on Facts’

On Friday, in the wake of the Hindenburg report, IHC said its business decisions are based on facts and analysis. Shares in IHC fell as much as 5.2% on Monday, before erasing losses.

With investments ranging from Elon Musk’s SpaceX, to a local fishery and Abu Dhabi’s largest property developer, IHC is at the forefront of a drive to diversify the United Arab Emirates economy and deploy its oil windfall overseas.

“Since Adani is India’s premier airport and port operator, it might be in Abu Dhabi’s flagship investment firm’s interest to bolster the existing relationship, especially since the emirate is focusing a lot on tourism, ports, and other similar businesses,” said Vijay Valecha, chief investment officer at Century Financial, a UAE-based financial consulting firm. “These factors could have played a big role in compelling IHC to invest further in the Adani Group.”

IHC, whose market capitalization has rocketed to $239 billion since 2019, is controlled by the Royal Group, a conglomerate that lists Sheikh Tahnoon bin Zayed al Nahyan — the UAE’s national security adviser and brother to the president — as its chairman. The company hasn’t been included in the global MSCI index and isn’t covered by any stock analysts tracked by Bloomberg.

IHC is watching the international market closely for new prospects, and will continue exploring further opportunities outside its traditional market this year, CEO Shueb said in the statement on Monday. It will also explore business opportunities in Europe, Africa, Asia, and South America.

India's Adani Group plans independent audit of group companies- Mint

Mon, January 30, 2023 

The logo of the Adani Group is seen on the facade of its Corporate House on the outskirts of Ahmedabad


(Reuters) - India's Adani Group is planning to hire one of the "big six" accounting firms to assess its corporate governance and audit practices following allegations of fraud by short-selling firm Hindenburg, Mint newspaper reported on Monday.

The audit will be commissioned after the group's unit, Adani Enterprises Ltd, completes a follow-on public offering, and based on its findings legal options will be sought, Mint reported, citing two people with direct knowledge of the matter.

"The audit will include eight of the group's listed firms. The independent audit report will be presented to the board, and basis the findings, the matter be taken to the court if the board of Adani Enterprises decides so," Mint quoted one of the sources as saying.

The audit will include a review of certain related party transactions, accounting practices and compliance with corporate governance standards at the firms, the report said, adding that it will also attempt to check whether Hindenburg's allegations are correct.

Adani did not immediately respond to a Reuters request for comment outside regular business hours.

Separately, Indian bourse National Stock Exchange of India (NSE) revised the circuit limits on Adani Transmission Ltd , Adani Total Gas Ltd and Adani Green Energy Ltd to 10% from 20%, according to the bourse's website on Monday.

These limits are set by the exchange to prevent large movements in the price of stocks in a very short time.

The research report by Hindenburg last week accused the conglomerate of improper use of offshore tax havens and flagging concerns about high debt, eroding $65 billion of the group's combined market value.

Adani on Sunday issued a 413-page rebuttal to the Hindenburg report, saying it complies with all local laws and had made the necessary regulatory disclosures.

Adani Enterprises' $2.5 billion secondary share sale, launched on Jan. 27, closed its second day amid weak investor sentiment. The stock closed at 2,892.85 rupees, 7% below the 3,112 rupees lower end of the offer price band. The upper band is 3,276 rupees.

(Reporting by Juby Babu in Bengaluru; Editing by Anil D'Silva)

Indian lender PNB has 70 billion rupees exposure to Adani Group -MD

Mon, January 30, 2023 

People walk past Punjab National Bank's Brady House branch in Mumbai
In this article:

MUMBAI (Reuters) - India's Punjab National Bank has a total exposure of 70 billion rupees ($859.30 million) to Adani Group, but there is currently no worry pertaining to those accounts, the state-run lender's managing director and chief executive said on Monday.

Last week, U.S. short-seller Hindenburg Research flagged concerns about Adani Group's debt levels and the use of tax havens. Adani Group has said that it complies with all local laws and has made the necessary regulatory disclosures.

"Out of 70 billion rupees, around 25 billion rupees is related to Adani's airport business," PNB CEO Atul Kumar Goel told reporters at a virtual press conference after the company's quarterly results.

"Whatever the exposure we are having is backed by cash flow."

However, the bank is keeping a "close eye" on the developments pertaining to the news flow around Hindenburg's research report, Goel said.

The bank has not given any loan to the Adani Group by pledging shares, he added.

Punjab National Bank reported a 44% drop in net profit for the October-December quarter due to rising provisions for bad loans.

The lender's asset quality improved, with gross non-performing asset ratio at 9.76% as of end-December, compared with 10.48% at the end of the prior quarter.

Its net NPA ratio was at 3.30% as of the end of December.

Goel said the bank is targeting a gross NPA ratio of around 9% and net NPA ratio of 3% by March-end. The bank is targeting credit growth of 12-13% and deposit growth of 8-9% for 2022-23. ($1 = 81.4620 Indian rupees)

(Reporting by Siddhi Nayak; Editing by Savio D'Souza)

Adani Touts Deep Global Bank Ties from Citi to Credit Suisse

Joyce Koh and Preeti Singh
Sun, January 29, 2023

(Bloomberg) -- Adani Group touted its deep local and international bank relationships in its 413-page rebuttal of the allegations of fraud by short seller Hindenburg Research.

The firm said it has strengthened access to diverse funding sources and structures, with strong domestic ties that are supported by global participation, according to a page in its statement Sunday. Some of the biggest names in banking are listed as backers of the Indian billionaire Gautam Adani, who’s also Asia’s richest man, though their exact exposure wasn’t disclosed.

In North America, there’s JPMorgan Chase & Co., Citigroup Inc. and Bank of America Corp. In Europe, the major lenders include UBS Group AG, Credit Suisse Group AG, Deutsche Bank AG and Barclays Plc, while in the Middle East, the roster is Emirates NBD PJSC, First Abu Dhabi Bank PJSC and Qatar National Bank QPSC.

Closer to home, Adani’s Asian backers include Japan’s megabanks Mitsubishi UFJ Financial Group Inc., Sumitomo Mitsui Financial Group Inc.’s main lending unit and Mizuho Financial Group Inc., as well as DBS Group Holdings Ltd. and Standard Chartered Plc. In its home base of India, the group counts on State Bank of India, Axis Bank Ltd. and ICICI Bank Ltd. for support.

In the document, Adani also said that its portfolio companies have shown successful syndication of banking transactions, citing deals such as its $10.5 billion acquisition of Holcim Ltd.’s Indian operations. For that deal, Barclays, Deutsche Bank and Standard Chartered were the underwriters, it said.

Hindenburg Research said on Monday Adani’s rebuttal has failed to specifically answer 62 of 88 questions posed by the short-seller.

Adani Risk Clouds Wall Street’s Star Emerging-Market Bet

Netty Ismail, Marcus Wong and Ronojoy Mazumdar
Sun, January 29, 2023 

The start of 2023 was meant to be India’s. The nation’s fast-growing economy and rapidly expanding equity markets had convinced money managers from Morgan Stanley Investment Management to State Street Global Advisors to call it a top investment destination.

Then came the $66 billion selloff in billionaire Gautam Adani’s corporate empire.

It’s a shock that forces Wall Street to reexamine its confidence on India’s expansion and its pro-business government, which helped the benchmark Sensex index trade last quarter at the highest in a decade versus the S&P 500. Those already-lofty valuations — combined with a scathing New York short-seller report attacking Adani Group — spotlights the contradictions within India’s runway for growth.

“India has to show its institutions are strong,” said Rajeev De Mello, a global macro portfolio manager at GAMA Asset Management, who owns the nation’s equities as part of his overweight emerging-market position. “Governance issues are a concern for all markets. But when valuations are higher than other countries, maintaining the integrity of the financial markets is critical.”

Investors have been increasingly drawn in by the narrative of opportunity in Indian assets. While bonds have been slowly making their way into global benchmark indexes, a flurry of companies have rushed to sell shares, increasing the size of the nation’s burgeoning stock market.

India’s stocks now account for more than 14% of MSCI’s emerging-market equities index, trailing only China, after it surpassed the weightings of Taiwan and South Korea last year. Morgan Stanley predicts India’s equity market is set to be the world’s third largest before the end of the decade.

But such optimism is what’s led shares in the Sensex index to trade at about 19 times their forecasted earnings, a metric that shows investors are willing to pay a premium on the prospect of stronger growth. Amid such high valuations, the Sensex index is headed for a second month of losses even as broader emerging equities rally.

Adani’s Counter

The 100-page report by short seller Hindenburg Research published last week containing allegations of stock manipulation and accounting fraud by Adani entities added more fuel to selling.

Hindenburg released its report just days before the billionaire’s flagship firm Adani Enterprises Ltd. launched India’s biggest ever primary follow-on public offering that’s seeking to raise 200 billion rupees ($2.4 billion).

In a 413-page rebuttal published Sunday, Adani Group said Hindenburg’s conduct was “nothing short of calculated securities fraud,” and said the research company was attacking India as a whole.

Read more: Adani Says Hindenburg Conduct Is ‘Calculated Securities Fraud’

For some, including Hasnain Malik, a strategist at Tellimer in Dubai, “bad behaviour by one corporate, should that prove to be case in this instance, usually does not derail confidence in the entire equity market.”

Even so, the questions surrounding one of India’s most-sprawling businesses could be what holds the nation back as it competes against China as an investment magnet.

Cheaper Alternatives

Indian stocks will be vulnerable to portfolio shifts as investors reduce their exposure to expensive assets and instead bet on China’s economic reopening its beneficiaries, such as Taiwan and South Korea, said Jon Harrison, managing director for emerging-market macro strategy at TS Lombard in London.

Carrhae Capital LLP, whose emerging-market hedge fund beat peers last year, also prefers to bet on China’s reopening. The manager will only seek bargains in Indian structural growth stories if “investors rush out of India to chase the China story,” said Ali Akay, the firm’s London-based chief investment officer.

“I personally do not think the structural story in India has changed much,” Akay said. “The increasing perception of China a strategic competitor rather than a partner has enabled India to assume the mantle of the regional bulwark against China that the West needs to build up and integrate further with.”

In an environment of heightened geopolitical risk — with the increasing rivalry between the US and China and Beijing’s mounting pressure on Taiwan — India provides a degree of “safety,” said Gaurav Mallik, chief investment strategist at State Street Global Advisors. The money manager has an overweight position in India, drawn to a growing middle class that “bodes well for consumption plays,” he said.

Mark Mobius, who spent more than three decades at Franklin Templeton Investments, plans to put more money into India, which may have already surpassed China as the world’s most-populous nation. A young and growing workforce could boost productivity if education and infrastructure investment can keep up.

“The long-term future of the market is great,” said the co-founder of Mobius Capital Partners LLP, which counts India as one of its top allocations