NEW YORK: Hindenburg Research, the financial research firm with an explosive name and a track record of sending the stock prices of its targets tumbling, is taking on one of the world’s richest men.
Hindenburg is back in the headlines after last week accusing Indian conglomerate Adani Group of “a brazen stock manipulation and accounting fraud scheme.” It cited two years of research, including talks with former Adani senior executives and reviews of thousands of documents.
The Adani Group has blasted the accusations, calling them “a malicious combination of selective misinformation and stale, baseless and discredited allegations that have been tested and rejected by India’s highest courts.”
Nevertheless, Hindenburg’s scorching allegations have caused the fortune of Adani Group’s founder, Gautam Adani, to slide by nearly $47 billion in just over a week, according to the Bloomberg Billionaires index. Here’s a look at the firm behind all the movement:
What is it?
Hindenburg says it specializes in “forensic financial research.” In layman’s terms, it looks for corruption or fraud in the business world, such as accounting irregularities and bad actors in management.
Hindenburg has even come to be known as Ponzi hunters in some circles, according to the Washington Post, which detailed how it helped bring down an alleged $500 million scheme that targeted Mormons.
Where did its name come from?
The firm says it sees the Hindenburg, the airship that famously caught fire in the 1930s to the cry of “Oh, the humanity,” as the “epitome of a totally man-made, totally avoidable disaster.” It says it looks for similar disasters in financial markets “before they lure in more unsuspecting victims.”
Who else has Hindenburg gone after?
It’s perhaps most famous for a 2020 report on Nikola, a company in the electric-vehicle industry whose founder Hindenburg said made misleading claims to ink partnerships with top auto companies hungry to catch up to Tesla.
Among its allegations, Hindenburg accused Nikola of staging a video to calm skepticism about its truck, one that showed the vehicle cruising on a road. Hindenburg said the video was actually just showing the truck rolling down a hill after getting towed to the top.
What has come of such accusations?
For Nikola, quick scrutiny from the government and investors.
The company and its founder, Trevor Milton, received grand jury subpoenas from the US Attorney’s office for the Southern District of New York and the N.Y. County District Attorney’s Office shortly after Hindenburg released its report.
The Securities and Exchange Commission also soon issued subpoenas to Nikola’s directors.
Milton was convicted this past October of charges he deceived investors with exaggerated claims about his company’s progress in producing zero-emission 18-wheel trucks fueled by electricity or hydrogen.
And Nikola in late 2021 agreed to pay $125 million to settle SEC charges that it defrauded investors by misleading them about its products, technical advancements, and commercial prospects.
What does Hindenburg get out of this?
It can make money. In its Adani report, it said that it had taken a “short position in Adani Group Companies” through bonds that trade in the US and other investments that trade outside India.
It has made similar “short” bets against other companies it published unflattering reports on. A “short” trade is a way for someone to make money if an investment’s price falls. Afterward, if the price of a company’s stock or bonds falls because of the negative attention from the report, Hindenburg can profit.
Such short sellers have been criticized for unfairly pushing down prices of stocks with potentially unfounded allegations. But proponents also call them a healthy part of a stock market, keeping stock prices in check and preventing them from running too high.
Who is Hindenburg, the firm targeting India’s Adani?
https://arab.news/58krc
Who is Hindenburg, the firm targeting India’s Adani?
- Hindenburg is an investment research firm with a focus on activist short-selling. It looks for corruption or fraud in the business world, such as accounting irregularities and bad actors in management, and It can make money out of its work
Pakistan to save $1 billion annually through new energy conservation plan — government document
- Planning Minister Ahsan Iqbal this week announced all markets in Pakistan would close at 8pm from July 1
- The move is part of a larger plan by the government to spur economic growth through the SE4ALL action plan
KARACHI: Cash-strapped Pakistan plans to save $1 billion per year through a new energy conservation plan that calls for, among other measures, closing markets across the country earlier than normal business hours, according to a government document, though Pakistani business leaders have rejected the proposal as “unrealistic” and “illogical.”
Planning Minister Ahsan Iqbal this week announced that the National Economic Council (NEC) had approved a proposal to close all markets across the country at 8pm from July 1.
The move is part of a larger scheme by the government to spur economic growth through an action plan called Export, E-Pakistan, Environment and Climate change, Energy and infrastructure and Equity and Empowerment or 5Es framework and Sustainable Energy for All (SE4ALL), a brain child of the planning ministry.
The energy conservation plan and associated implementation roadmap was approved by the federal cabinet in January 2023 while the National Energy Efficiency and Conservation Policy 2023, prepared by the National Energy Efficiency and Conservation Authority (NEECA), was approved by the federal cabinet on May 10, 2023.
“The easy to deploy short- and medium-term administrative measures proposed under this conservation plan could save estimated outflow of USD ($) One billion per annum in terms of energy saving,” a government document seen by Arab News said.
Listing measures under the plan, the document said:
“The closure of commercial markets at 8 pm which will result in annual energy saving of 2.85 billion electricity units and will offer a financial saving of 282 million USD, Ban on the incandescent bulbs which will result in a saving of 1 billion electricity units in a year with a financial benefit of 103 million USD, Mandatory installation of the conical baffles in the water geysers which will save 419 million USD.”
Overall, the long-term implementation of the NEECA policy measures will result in financial savings of $6.4 billion from 2030 onwards, according to official estimates.
The South Asian nation last attempted to enforce early market closures in June and December 2022 but was met with resistance from traders. This time too, Pakistani traders have rejected the government’s plan, saying it will cause revenue and job losses at a time that the country is grappling with record inflation, fiscal imbalances, and low reserves.
“We strongly reject the government's plan to shut down markets at 8pm,” Kashif Chaudhry, the president of the Markazi Tanzeem-e-Tajran Pakistan, a central body of traders, said in a statement. “The decision has been taken in haste without consulting traders. It is an unrealistic plan.”
Chaudhry called the plan an “enemy of traders and the public,” and said such “illogical energy conservation plans” had also failed in the past.
Atiq Mir, the chairman of the All Karachi Tajir Ittehad, the main business association in the city, concurred with Chaudhry.
“The decision is not practicable,” he told Arab News. “Such decisions were taken in the past and could not be implemented.”
Retail sector stakeholders said the government’s decision would impact both revenue generation and employment rates.
“I think the decision taken is not realistic under the current economic downturn and would put the livelihood of around three million people at stake,” Rana Tariq Mehboob, the chairman of the Chainstore Association of Pakistan (CAP), told Arab News.
“This decision will hit the economy with around Rs3.6 trillion losses while it is already reeling under the impact of slowdown.”
Experts also said there was little hope the new plan would be implemented.
“They will not be able to implement this time too,” Ammar Habib Khan, an economist and energy expert, told Arab News. “Due to weak administration and weak enforcement mechanisms, you can’t implement this energy saving action plan … In fact, there is no will to enforce it.”
Ahsan Iqbal and other planning ministry officials did not respond to Arab News queries about expected measures to enforce the energy saving plan.
Pakistani budget caught between IMF expectations and election
- IMF program for South Asian country runs out this month with about $2.5 billion in funds yet to be released
- IMF funds are crucial for Pakistan to avert a balance of payments crisis and avoid defaulting on debt obligations
KARACHI: Pakistan's government will hope to find a balance between reforms to satisfy the International Monetary Fund and measures to win over voters in an imminent election in its budget for the 2023-24 fiscal year to be announced on Friday, analysts said.
Pakistan's IMF program runs out this month with about $2.5 billion in funds yet to be released as it struggles to strike an agreement with the lender, as it grapples with record inflation, fiscal imbalances, and low reserves.
A general election is due by November, which the government will be hoping will end turmoil arising from a protest campaign former premier Imran Khan has led since he was ousted in a no-confidence vote last year.
Former finance minister Miftah Ismail said it was essential for the government to secure IMF funding so there was little chance of an expansionary budget.
"Without the IMF, it would be very difficult for Pakistan to survive the next fiscal year, so I’m sure the government will come up with a budget that is more or less in line with IMF prescriptions," Ismail said.
A staff-level IMF agreement to release $1.1 billion of a $6.5 billion package has been delayed since November.
The funds are crucial for Pakistan to avert a balance of payments crisis, and most analysts believe that even after the expiry of the current program, Pakistan will have to seek a bailout in the upcoming fiscal to avert defaulting on debt obligations.
Central bank reserves can cover imports for about a month.
Inflation surged to 37.97% in the country of 220 million people in May, a record for the second consecutive month and the highest rate in South Asia.
On Tuesday, the planning minister announced that budget targets for development spending would be 1,150 billion rupees ($4.02 billion) in the new fiscal year, while inflation for the year is projected at 21%.
With the general election looming, some analysts believe the government will announce vote-winning measures on Friday, even if the promises have to be scaled back later.
Fahad Rauf, head of research at the Karachi-based brokerage Ismail Iqbal Securities, said he expected a pay rise for government employees and a package for the agriculture sector, with more of a burden being piled on an already narrow tax base, and few if any, meaningful steps to broaden it.
"Banks and taxed industries will continue to feel the heat," Rauf said, adding that he thought a so-called super tax of 10% on more than 15 sectors would be levied again, even though the government said last year it was a one-off payment.
A year ago, the government set a total expenditure target at 9.5 trillion rupees for the 2022/23 year from 8.49 trillion rupees the year plans had to be scaled back after IMF discontent.
Rauf said he expected a repeat of that this year.
Independent economist Sakib Sherani said he too believed the budget would be full of populist pre-election measures that would be unlikely to survive the July-September quarter, given the necessity of more IMF support.
'Trust OPEC+,' Saudi energy minister says after announcement of voluntary oil output cuts
- Saudi Arabia pledged to cut production by further 1 million barrels a day from July
- Voluntary cut announcement is on top of broader deal by OPEC+ to limit supply into 2024
VIENNA: Defending the decisions made by the oil producers’ alliance, Saudi Energy Minister Prince Abdulaziz bin Salman stressed the need to “trust OPEC+” which he described as “the most effective international organization” working to restore market stability.
Talking to CNBC International’s Dan Murphy on Sunday, the energy minister said the voluntary oil output cuts announced by the Organization of the Petroleum Exporting Countries and its allies including Russia, also known as OPEC+, were precautionary measures.
“It was just our sensibility, if you will call it, that the environment was not sufficiently allowing confidence to be there. So taking a precautionary measure tends to put you on the safe side. And it is part of the typical rhythm that we have installed in OPEC, which is being proactive, being preemptive,” Prince Abdulaziz said.
Oil prices rose by more than $1 a barrel on Monday after Saudi Arabia pledged to cut production by a further 1 million barrels per day from July to counter macroeconomic headwinds that have depressed markets.
The voluntary cut is on top of a broader deal by OPEC+ to limit supply into 2024 as the group seeks to boost flagging oil prices.
OPEC+ pumps about 40 percent of the world’s crude and has cut its output target by a total of 3.66 million bpd, amounting to 3.6 percent of global demand.
Commenting on the Saudi decision, Prince Abdulaziz said: “It is icing on the cake.”
The Kingdom has kept the option open for an extension to the voluntary cuts depending on “how things really work.”
The Saudi energy minister told CNBC that the oil producers’ group is considering new baselines to ensure equitable and fair production quotas for all members in the group according to their capacities in a transparent manner.
OPEC+ now intends to have three independent analysts — IHS, Wood Mackenzie, and Rystad Energy — study the individual capacity of each group member.
“Hopefully by mid-year next year, we will have new baselines and a way forward that makes it more equitable, more fair for everybody to assign for them production levels that are going to be commensurate with their capacities in the most transparent way,” the minister said.
When asked about trusting OPEC’s ally Russia, Prince Abdulaziz responded in the affirmative.
“Absolutely. But I always like President (Ronald) Reagan’s line: trust but verify.” He said, noting the instrumental role of independent sources in assessing production.
Pakistani PM promises business-friendly, pro-people budget as IMF deal remains elusive
- Sharif approves increasing Public Sector Development Program from Rs700 billion to Rs950 billion
- Pakistan's national inflation rate rose to 37.97% in May, setting national record for second month
ISLAMABAD: Prime Minister Shehbaz Sharif said on Monday the budget for fiscal year 2023-24, due to be presented on June 9, would bring economic prosperity, business friendly policies and public welfare to the country, as an International Monetary Fund bailout deal remains elusive after months of talks.
Millions of Pakistanis are struggling to cope as Pakistan's annual inflation rate rose to 37.97% in May, setting a national record for the second month in a row and adding to the South Asian nation's problems of a balance of payment crisis and the risk of a sovereign default. Inflation has been on an upward trend since early this year after the government took painful measures as part of fiscal adjustments demanded by the IMF to unlock stalled funding.
The IMF demands include the withdrawal of subsidies, a hike in energy prices, a market-based exchange rate and new taxation to generate extra revenue in a supplementary budget.
Islamabad says it has met the demands, but the IMF has yet to release the $1.1 billion funding stalled since November as part of the $6.5 billion Extended Fund Facility agreed in 2019.
The funding is critical for Pakistan to unlock other bilateral and multilateral financing. The IMF program is set to expire on June 30 this year.
“The central point of the fiscal year 2023-24 budget is going to be economic prosperity, public welfare and business friendly policies,” the prime minister said in a statement, as he approved increasing the Public Sector Development Program (PSDP) from Rs700 billion to Rs950 billion to boost growth and create job opportunities.
The statement came after the prime minister held a detailed meeting with coalition partners in Islamabad to incorporate their proposals in the upcoming budget.
“The government is endeavouring to ensure prudent utilisation of all available resources despite economic challenges,” he said, promising to allocate a “sufficient amount” for those affected by floods last year and start a flood response program to deal with the disaster in future.
Floods from record monsoon rains in Pakistan and glacial melt in the country’s mountainous north last year affected 33 million people and killed over 1,500, washing away homes, roads, railways, bridges, livestock and crops in damage estimated at $30 billion.
Separately, the Prime Minister’s Coordinator for Economy and Energy, Bilal Azhar Kayani, told Arab News Sharif’s government would be presenting a “pro-investor and pro-poor budget.”
He declined to share the total outlay of the budget or its revenue and taxation targets, saying: “These details will be revealed in the National Assembly on the budget day.”
He said finance ministry officials, including Finance Minister Senator Ishaq Dar, were meeting all stakeholders, including industrialists and professionals, to get their input on the budget: “We will be trying to entertain proposals of all stakeholders to make an investor friendly budget.”
Economists said the country’s net federal receipts were not sufficient to even pay for the markup and the government had to take domestic and foreign loans to bear all expenditures.
“Pakistan’s budget is in serious distress and in need of serious repair,” Dr Khaqan Hassan Najeeb, a former economic adviser to the government, told Arab News.
He said that a look at the budget of FY-23 would reveal that Pakistan’s net federal receipts with the federal government would not be sufficient to even pay for the markup which had risen from the budgeted amount of Rs 3900 billion to Rs 5300 billion.
“It is unfortunate that all other expenditures would have to be borne by taking domestic and foreign loans,” he said, adding that the same fact would become even larger as the markup payment for the FY-24 budget would be much bigger considering the rise of the policy rate to 21 percent.
“The borrowing needs would be higher without meaningful expenditure and tax reforms,” Najeeb said. “Without containment of a fiscal deficit to near 5 percent of GDP on a permanent basis Pakistan’s fiscal and debt sustainability will never be ensured.”
The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) suggested the government ensure tax reforms in the country and add new taxpayers to boost revenue.
“The taxation system in Pakistan contributes less than 10 percent of the GDP to the national exchequer, indicating that it is not balanced, broad-based and simplified,” Irfan Iqbal Sheikh, President FPCCI, told Arab News.
The taxation system's heavy reliance on indirect taxation and surcharges was damaging the economy, he said, adding that taxes were insufficient for debt servicing, defence, social welfare and public-sector development programs.
Sheikh said the upcoming federal budget was a golden opportunity for the government and the business community alike to agree upon and introduce budgetary measures and policies to enable industrial growth in Pakistan, explore avenues for import substitution and revive sick units through targeted, phased and result-oriented fiscal measures.
“Industrialization is the key to wealth creation and reversing the trend of dwindling per capita income in the country; bridge trade deficit and create employment in these difficult times,” he said.
“We can only have healthy foreign exchange reserves on a sustainable basis if our industry earns substantive sums in a number of industrial sectors like many of our regional and sub-regional countries.”
Prince Fahad bin Mansour Al-Saud represents Saudi Arabia at G20-Startup20 engagement group
- Al-Saud expressed his gratitude to King Salman and Crown Prince Mohammed bin Salman for the exemplary support they provide to entrepreneurs.
- “Today we witness the impact of this support on the entrepreneurship system in the Kingdom. This has resulted in accelerated growth in our national economy,” he said.
RIYADH: Prince Fahad bin Mansour Al-Saud has been chosen to represent Saudi Arabia in the G20-Startup20 engagement group, the Saudi Press Agency reported on Saturday.
Launched earlier this year under the Indian Presidency of G20 2023, the Startup20 engagement group is one of 11 official networking groups.
Al-Saud expressed his gratitude to King Salman and Crown Prince Mohammed bin Salman for the exemplary support they provide to entrepreneurs.
“Today we witness the impact of this support on the entrepreneurship system in the Kingdom. This has resulted in accelerated growth in our national economy,” he said.
Having been appointed to represent the Kingdom due to his extensive entrepreneurial experience, Al-Saud stressed the importance of Saudi Arabia’s participation in the Startup20 official group summit.
“The Kingdom is a leading country in entrepreneurship and an enabler for startups under Vision 2030, which aims to raise small and medium enterprises’ contribution to GDP from 20 percent to 35 percent,” he said.
The chair of the board of directors of the Saudi Entrepreneurship Vision, Al-Saud said that the Startup Summit in India was an opportunity to exchange creative and innovative ideas, find strategic partnerships and investment opportunities, and learn about the experiences of the G20 countries, in addition to promoting the projects of Saudi entrepreneurs.
The group is distinguished as the first official group specialized in emerging companies, which are considered the most critical engines of economic growth and sustainable development, according to SPA’s report.
The group seeks to communicate the voice of the global start-up system through the G20 countries, and recommendations will be developed to be formally submitted to the G20 leaders for consideration.
Outreach groups are independent collaborative groups led by civil society organizations in the host country each year.
Al-Saud has founded several companies in various fields. He holds a bachelor’s degree in entrepreneurship from Loyola Marymount University, Los Angeles, California.
