Business

MUMBAI — Shares in the flagship firm of troubled Indian conglomerate Adani rose almost 15 per cent on Tuesday, clawing back some of its recent huge losses after saying it would repay more than $1 billion in loans.

Investors wiped out around $120 billion in value from the group owned by tycoon Gautam Adani after claims of accounting fraud by short-seller US investment group Hindenburg Research on January 24.

The collapse raised concerns about the group's ability to raise fresh financing to pay down its debts. It cancelled a share sale, and reportedly also a bond issue, last week.

But India's biggest conglomerate said Monday it was repaying early loans worth $1.1 billion, in a move meant to reassure investors.

The Adani Ports subsidiary said Tuesday it would also repay debts of around 50 billion rupees ($605 million) and slash by half its capital expenditure in the next financial year.

Adani Enterprises, the group's flagship firm, soared as much as 25 per cent on Tuesday, with trading suspended three times on the way up.

The shares closed up 14.6 per cent — although they are still down by more than half since the start of the year.

Other group companies were mixed, with Adani Transmission rising 5 per cent but closing 0.77 per cent lower, and Adani Total Gas down 5 per cent and trade suspended again.

"The markets are happy that they prepaid a chunk of their borrowings. This is a refreshing sign of confidence," markets commentator Srinath Sridharan told AFP.

Fitch Ratings said Tuesday that Indian banks' exposure to the Adani group was "insufficient in itself to present substantial risk to the banks' standalone credit profile".

'Largest con' 

Hindenburg accused Adani of a "brazen stock manipulation and accounting fraud scheme" in "the largest con in corporate history".

Adani artificially boosted the share prices of its units by funnelling money into the stocks through offshore tax havens, Hindenburg said.

The conglomerate has rejected the claims as a "maliciously mischievous" reputational attack.

Last week tycoon Adani, 60, insisted the "fundamentals of our company are very strong, our balance sheet is healthy and assets robust".

His personal wealth has more than halved, seeing him fall from number three in the Forbes real-time list of the richest people in the world to 17th as of Tuesday.

India's political opposition says Adani's closeness with Prime Minister Narendra Modi, with both men from Gujarat state, has allowed him to win contracts unfairly and avoid proper oversight.

Parliament has been adjourned several times in recent days with opposition parties calling for a probe into Modi and Adani's links.

Rahul Gandhi from the Congress party, which staged protests Monday, told parliament on Tuesday that the two men already had close ties when Modi was Gujarat's chief minister. 

"The result of that was tremendous growth and expansion of his businesses in Gujarat," Gandhi said.

"Then the real magic began in 2014 when Modi comes to Delhi [as prime minister] and Adani — who was number 609 on the global rich list — reached number two within a few years."

LONDON — French automaker Renault and Japanese partner Nissan said on Monday they were opening a "new chapter" in their tension-marred alliance as they signed a deal to reboot their 24-year relationship.

The "rebalanced" partnership approved by their boards will end Renault's dominant position, reducing its stake in the Japanese firm from 43.4 per cent to 15 per cent, the same size as Nissan's share in its French counterpart.

The agreement includes Nissan taking a stake of up to 15 per cent in Renault's new electric vehicle venture Ampere, the companies said in a joint statement.

They also announced joint projects in Latin America, India and Europe for the production of vehicles ranging from pick-up trucks to SUVs and electric cargo vans.

The alliance began in 1999, when Renault rescued Nissan from bankruptcy. They were joined by Mitsubishi Motors in 2016, when Nissan took a 34 per cent stake in its struggling Japanese rival.

Tensions erupted in 2015 when the French state increased its stake in Renault. It was later reduced and an agreement was reached to cap the government's ability to interfere in the alliance's affairs.

The union was shaken again by the 2018 arrest of Nissan boss Carlos Ghosn, who claimed the charges against him were intended to prevent him from bringing the Japanese and French automakers closer together.

The Renault board approved the overhaul on Sunday while Nissan signed off on it on Monday, a week after the agreement was announced, following months of painstaking negotiations.

Analysts have described the rebalancing of the deal as a way to build confidence between the two carmakers, especially after the fallout from the Ghosn scandal.

"We must build a strong culture of transparency and respect," Nissan Chief Executive Makoto Uchida said at a press conference held on neutral ground in London.

The Renault-Nissan-Mitsubishi alliance — which today counts 375,000 employees worldwide — was the world's top carmaker by sales in 2018 but has since fallen behind Toyota, Volkswagen and Hyundai-Kia.

"The basis of this deal is that we are reactivating business operations like at the beginning of this alliance," Renault CEO Luca de Meo said in English.

"We will be consistent, result focused, generous and fair, as we have been on our side" of the negotiations, he said.

'New agile partnership' 

Monday's statement said the overhaul would "open a new chapter" for the alliance.

"This far-reaching programme paves the way for a renewal and strengthening of the 24-year partnership, creating a new agile spirit and harnessing the pioneering technologies of all three Alliance members," the statement said.

Renault will not immediately sell the remaining 28.4 per cent stake in Nissan, instead transferring the shares into a French trust because their current market value is lower than that registered in Renault's accounts.

They will be sold when it is "commercially reasonable" for Renault, with Nissan having a right of first offer.

In November, Renault announced it would split its operations in two — Ampere, and a separate subsidiary for petrol, diesel and hybrid cars that will pair up with China's Geely.

But concerns at Nissan about future technology transfers to the Chinese carmaker, as well as details over the sharing of electric vehicle intellectual property, complicated the negotiations.

Under the deal, Nissan will invest up to 15 per cent in Ampere, "with the aim to become a strategic investor".

Mitsubishi will also "consider investing" in Ampere, the statement said.

Global projects 

The agreement includes industrial projects that De Meo said could bring the companies billions of euros (dollars) each year.

In India, where Nissan has a factory, the Japanese and French companies will collaborate on several new projects including SUVs.

A new half-tonne pick-up developed by Renault and shared with Nissan will be launched in Argentina.

In Mexico, Nissan will produce a new model for Renault.

Renault will share its electric cargo van project in Europe, called FlexEVan, with Nissan. 

DOHA — Qatar's main international airport aims to pass a record 40 million passengers this year as the Gulf state seeks to build on staging the World Cup to bolster its reputation, its tourism chief said Sunday.

Hamad International Airport recorded 39.5 million passengers in 2019 before the coronavirus pandemic struck, and last week announced that with the World Cup in November and December, numbers had recovered to 35.7 million in 2022.

Tourism minister and Qatar Airways chief executive Akbar Al Baker said capacity restrictions at the airport held back numbers last year.

"If we did not have shortage of capacity we would have exceeded the 2019 figures," Baker told reporters on the sidelines of announcing a jewellery and watch show, the latest in a series of events aiming to draw international visitors.

"I am not satisfied with 39.5 million passengers," he added.

"We are hoping that this year we will break a record in the numbers of passengers that will pass through Hamad.

"Keep in mind that there is no more FIFA [World Cup] so crossing that record number will really be a big achievement and a lot of pressure on Qatar Tourism to bring people," he said.

The wealthy Gulf state is spending billions of dollars expanding capacity at Hamad airport to 70 million people a year and increasing Qatar Airways routes as it seeks to become a dominant player in international travel.

Arch-rival Dubai airport in the United Arab Emirates announced in November that it expected 64.3 million passengers in 2022.

BEIRUT — The French diplomat charged with coordinating international support for Lebanon, so it can receive International Monetary Fund (IMF) aid, on Friday criticised the slow pace of reforms in the crisis-hit country.

The IMF last April announced an agreement in principle with Beirut for $3 billion in aid spread over four years, but conditional on implementing crucial reforms.

"It's really slow," Pierre Duquesne told journalists in the Lebanese capital, at the same time highlighting "a few minor adjustments that go in the right direction".

Among the reforms demanded by the IMF is parliament's approval of the 2022 budget, which Duquesne said came "late".

Lebanon has been effectively leaderless for months, without a president and ruled by a caretaker Cabinet.

The IMF is also demanding reform of banking secrecy laws and a restructuring of the banking sector as a whole, as well as a law on capital controls.

"There is no other solution than the IMF to provide capital, credibility and confidence... and to reduce inequality," Duquesne said.

Paris will host an international meeting on Monday on how to end months of political deadlock in Lebanon, with representatives from France, the United States, Saudi Arabia, Qatar and Egypt.

Duquesne is in Beirut to provide French support for the recovery of Lebanon's energy sector, a mission that has already taken him to Egypt and Jordan.

"The two countries have expressed extreme goodwill and said they are technically ready to supply gas and electricity to Lebanon," which is almost completely without power, the diplomat said.

However, energy supplies would have to pass through Syria, which is subject to stringent US sanctions.

Duquesne said he would visit Washington over the next 10 days to discuss "exemptions" for Egyptian gas and Jordanian electricity supplied to Lebanon via Syria.

There, he will also meet officials from the World Bank, which is expected to finance energy deliveries.

Lebanon's political impasse has hampered efforts to resolve its worst-ever financial crisis.

The Lebanese pound has lost more than 95 per cent of its market value to the dollar since 2019, and more than 80 per cent of the population lives in poverty, according to the United Nations.

Last September, the IMF also criticised the Lebanese authorities, saying progress in implementing reforms remained "very slow".

LONDON — British energy giant Shell on Thursday unveiled record annual net profit of $42.3 billion thanks to surging oil and gas prices, sparking outrage from green groups and unions as the UK endures a cost-of-living crisis.

The post-tax figure, fuelled by the invasion of Ukraine by major energy producer Russia, was more than double the amount achieved in 2021, Shell's earnings statement revealed. 

Revenue rocketed 45 per cent to a dizzying $381 billion in 2022, mirroring huge gains by rivals.

Colossal profits for energy majors worldwide have sparked public fury as consumers see the cost of heating and lighting their homes and businesses rocket.

Environmental campaigner Greenpeace on Thursday protested outside Shell's London headquarters, arguing that the group is "profiteering from climate destruction".

The Trades Union Congress said an increased windfall tax could help fund wage rises for public sector workers currently locked in a wave of strikes in protests over pay that lags soaring inflation.

"Instead of holding down the pay of paramedics, teachers, firefighters and millions of other hard-pressed public servants, ministers should be making big oil and gas pay their fair share," said TUC General Secretary Paul Nowak.

Billions for shareholders 

Shell said it would return a further $4 billion to shareholders following huge buybacks already last year — and would significantly lift its dividend — following the record earnings.

"Our results in the fourth quarter and across the full year demonstrate the strength of Shell's differentiated portfolio, as well as our capacity to deliver vital energy to our customers in a volatile world," new Chief Executive Wael Sawan said in the results statement.

Shell is looking to reinvent itself under the company's former renewables boss Sawan, who replaced Ben van Beurden in the top seat at the start of the year.

Energy firms are under increasing pressure to step up efforts to transition away from fossil fuels as the world scrambles to become a net-zero emissions economy by 2050.

But Shell rival BP said Monday that while the transition could be accelerated by Russia's war in Ukraine, "oil continues to play a major role in the global energy system for the next 15-20 years".

The invasion a year ago of Ukraine by its neighbour Russia sent oil and gas prices rocketing.

Russia is a major producer of fossil fuels and the war resulted in slashed supplies.

Record US profits 

Shell's update comes two days after US energy major ExxonMobil reported an even bigger record profit of almost $56 billion, handing massive windfalls to shareholders.

This has caused US President Joe Biden to hit out at American energy giants, including Chevron, insisting they should be helping to reduce energy prices during a cost-of-living crisis. 

On Tuesday Biden tweeted that the only thing "stopping Big Oil from increasing production [and therefore lowering prices] is their decision to pay shareholders billions instead of reinvesting profits".

The president's intervention came after a White House spokesperson told the BBC that Exxon's record profits were "outrageous", especially after "the American people were forced to pay such high prices at the pump" in the wake of the Russian invasion of Ukraine.

In a bid to ease the pain for consumers, governments have introduced windfall taxes on the mammoth profits.

Shell has revealed that windfall taxes imposed by the European Union and UK following the surge in earnings would cost the group about $2 billion.

"Shell has once more flexed its financial muscles on a massive scale, while riding the waves of an economic cycle which can bring major challenges as well as rewards," said Richard Hunter, head of markets at Interactive Investor.

"The fluctuating opinions surrounding demand from China following its reopening will continue, and there could also be bumps in the road should even a mild global recession ensue."

MUMBAI — Shares in Gautam Adani's empire nosedived again on Wednesday as the Indian tycoon dropped off the Forbes top 10 rich list following allegations of massive accounting fraud.

The five-day rout has now wiped out around $92 billion of the value of the conglomerate's listed units, Bloomberg News said, while Adani's fortune has collapsed by more than $40 billion.

The share price of flagship firm Adani Enterprises suddenly dropped further on Wednesday afternoon, closing 28.45 per cent lower on the Mumbai stock exchange.

The trigger was news that Swiss banking giant Credit Suisse had stopped accepting Adani bonds as collateral for loans it advances to private banking clients, Bloomberg reported.

The slide in Adani's personal wealth on the real-time Forbes rich list meant that the school dropout billionaire was overtaken as Asia's richest man by fellow Indian Mukesh Ambani.

Adani Total Gas — in which French giant TotalEnergies owns 37.4 per cent — dropped another 10 per cent on Wednesday, forcing the Bombay Stock Exchange to suspend trade in the stock soon after the market's open.

Adani Ports dropped almost 18 per cent, while Adani Power and Adani Wilmar fell 5 per cent each.

The sudden sharp drop in Adani Enterprises came despite a $2.5 billion stock sale in the firm that concluded on Tuesday and was oversubscribed.

Smaller retail investors largely steered clear from the follow-on public offering, however, impeding Adani's plans to expand his shareholder base to include "the average, normal Indian mom and dad as shareholders".

Large buyers instead propped up the share sale, including fellow Indian tycoons Sajjan Jindal and Sunil Mittal, Bloomberg News reported, citing unidentified sources.

1,000 per cent 

Publicity-shy Adani, 60, has seen his empire expand at breakneck speed, with shares in Adani Enterprises soaring by more than a thousand per cent over the past five years.

This helped make him, as of last week, the world's third-richest man behind Elon Musk and Bernard Arnault and family.

According to US short-seller investment group Hindenburg Research, Adani has artificially boosted the share prices of its units by funnelling money into the stocks through offshore tax havens.

This "brazen stock manipulation and accounting fraud scheme" is "the largest con in corporate history", Hindenburg said in its explosive report issued last week.

Even before the report there were concerns that Adani had taken on too much debt.

Adani said it was the victim of a "maliciously mischievous" reputational attack and issued a 413-page statement on Sunday that said Hindenburg's claims were "nothing but a lie".

Hindenburg, which makes money by betting on stocks falling, said in response that Adani's statement failed to answer most of the questions raised in its report.

Opposition heckles 

Critics say Adani's close relationship with Prime Minister Narendra Modi has helped him win business and avoid proper regulatory oversight.

Modi, who like Adani is from Gujarat state, has not commented publicly since the Hindenburg claims, which analysts say has hurt India's image just as it seeks to woo overseas investors away from China.

The firm's many interests include ports — the firm took control of one of Israel's biggest this week — telecoms, airports, media and energy, both in coal and renewables.

India's opposition Congress party called this week for a "serious investigation" by the central bank and regulator into Adani's firms following the Hindenburg allegations.

"For all its posturing about black money, has the Modi government chosen to turn a blind eye towards illicit activities by its favourite business group?" Congress said.

Opposition lawmakers mockingly chanted "Adani! Adani" on Wednesday as Finance Minister Nirmala Sitharaman talked about ports during a budget speech.

WASHINGTON — Global growth is set to be higher than expected this year, the IMF said on Monday, raising its forecast on surprisingly strong consumption and investment while China's lifting of zero-COVID restrictions provides another boost.

World growth has been bogged down by fallout from Russia's invasion of Ukraine last year, economic downturns and efforts to rein in spiraling costs of living.

Against this backdrop, the International Monetary Fund expects the global economy to expand 2.9 per cent this year, slowing from 2022 to a rate that remains weak by historical standards.

But "adverse risks have moderated" since last October's forecast, said the IMF in the latest update to its World Economic Outlook report.

"The year ahead will still be challenging... but it could well represent a turning point with growth bottoming out and inflation declining," IMF chief economist Pierre-Olivier Gourinchas told reporters.

In particular, the IMF sees Germany and Italy avoiding recessions this year, shifting from earlier predictions, as European growth proved "more resilient than expected" despite shocks from war in Ukraine.

And the fund does not expect global GDP to shrink, with Gourinchas noting "We're well away from any sort of global recession marker."

While the outlook has not worsened this time around, there are still challenges to overcome to reach sustainable recovery, he said.

Surprising resilience 

Most advanced economies are expected to slow this year, driving the global growth decline, said the IMF. Yet, many countries have shown surprising resilience.

"The forecast of low growth in 2023 reflects the rise in central bank rates to fight inflation — especially in advanced economies — as well as the war in Ukraine," the IMF said.

But although US growth is projected to fall to 1.4 per cent in 2023 and euro area growth is set to slump to 0.7 per cent, both figures reflect upward revisions from last October.

"Economic growth proved surprisingly resilient in the third quarter of last year, with strong labour markets, robust household consumption, and also business investment," said Gourinchas.

Countries adapted better than expected to the energy crisis in Europe too, he added, with the region seeing lower-than-anticipated gas prices and having enough resources to make shortages unlikely this winter.

Inflation has shown signs of decreasing globally as well, and China's reopening holds the promise of a rapid rebound in the country's economic activity, Gourinchas said.

The world's second-biggest economy has in the past contributed up to 40 percent of global growth, IMF chief Kristalina Georgieva previously noted.

This year, its growth is pegged at 5.2 per cent — 0.8 points more than earlier expected — on "rapidly improving mobility" after it abruptly ended its zero-COVID policy in December.

But the United Kingdom saw a significant downgrade to its growth forecast, and is now seen to contract 0.6 per cent this year.

This comes as high energy prices hurt households and businesses, while tighter monetary policy weighs on economic activity.

'Not yet won' 

Despite a rosier outlook, the IMF warned of numerous risks on the horizon.

An escalation of war in Ukraine could impact food and energy prices, and China's recovery might stall on a deepening real estate crisis or severe Covid outbreaks — due to low population immunity and insufficient hospital capacity.

Stubborn inflation could also prompt further tightening by central banks and hold back business activity as borrowing costs rise.

"The fight against inflation is not yet won," Gourinchas said.

Overall inflation may have peaked, but the "core" calculation which strips out the volatile food and energy components remains well above pre-pandemic levels in most economies.

Even as tighter monetary policy starts to cool demand and lower inflation, the IMF warned its "full impact is unlikely to be realized before 2024."

There could be favorable surprises, such as if consumption remains solid or inflation falls without sparking a rise in unemployment.

But Gourinchas cautioned it is "premature to put too much weight on that sort of benign scenario" where prices cool on their own.