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  • How Sweden and Finland could help NATO contain Russia

    How Sweden and Finland could help NATO contain Russia

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    TORNIO, Finland/KARLSKRONA, Sweden, July 3 (Reuters) – High above a railway bridge spanning a foaming river just outside the Arctic Circle, Finnish construction workers hammer away at a project that will smooth the connections from NATO’s Atlantic coastline in Norway to its new border with Russia.

    “We will be removing some 1,200 of these one by one,” says site manager Mika Hakkarainen, holding up a rivet.

    Until February 2022, the 37-million euro ($41 million) electrification of this short stretch of rail – the only rail link between Sweden and Finland – simply promised locals a chance to catch a night train down to the bright lights of Stockholm.

    After Russia invaded Ukraine, that changed.

    Now Finland is part of NATO, and Sweden hopes to join soon.

    As the alliance reshapes its strategy in response to Russia’s campaign, access to these new territories and their infrastructure opens ways for allies to watch and contain Moscow, and an unprecedented chance to treat the whole of northwest Europe as one bloc, nearly two dozen diplomats and military and security experts told Reuters.

    “PUT RUSSIA AT RISK”

    The Finnish rail improvements around Tornio on the Swedish border are one example. Due for completion next year, they will make it easier for allies to send reinforcements and equipment from across the Atlantic to Kemijarvi, an hour’s drive from the Russian border and seven hours from Russia’s nuclear bastion and military bases near Murmansk in the Kola peninsula.

    Among forces based there, Russia’s Northern Fleet includes 27 submarines, more than 40 warships, around 80 fighter planes and stocks of nuclear warheads and missiles, data collected by the Finnish Institute of International Affairs (FIIA) shows.

    In a military conflict with NATO, the Fleet’s main task would be to secure control of the Barents Sea and stop ships bringing reinforcements from North America to Europe through the waters between Greenland, Iceland and the UK.

    That’s something Finland can help NATO resist.

    “It’s all about containing those kinds of capabilities from the north,” retired U.S. Major General Gordon B. Davis Jr. told Reuters.

    Maps showing marine traffic through the Baltic

    Besides opening its territory, Helsinki is buying the right assets, particularly fighter jets, “to add value to (the) northeastern defence and, frankly, in a conflict put Russia at risk,” he said.

    Sweden’s contribution will, by 2028, include a new generation of submarines in the Baltic Sea that Fredrik Linden, Commander of Sweden’s First Submarine Flotilla, says will make a big difference in protecting vulnerable seabed infrastructure and preserving access – currently major security headaches, as the September 2022 destruction of the Nord Stream gas pipelines read more showed.

    “With five submarines we can close the Baltic Sea,” Linden told Reuters. “We will cover the parts that are interesting with our sensors and with our weapons.”

    Analysts say the change is not before time. Russia has been actively developing its military and hybrid capabilities in the Arctic against the West, partly under the cover of international environmental and economic cooperation, the FIIA’s Deputy Director Samu Paukkunen told Reuters. Russia’s defence ministry did not respond to a request for comment.

    Paukkunen’s institute estimates Western armed forces are militarily about 10 years behind Russia in the Arctic.

    Even with the losses that Russia has sustained in Ukraine, the naval component of the Northern Fleet and the strategic bombers remain intact, Paukkunen said.

    NATO-member Denmark phased out its submarine fleet in 2004, part of a move to scale back its military capabilities after the end of the Cold War, and it has yet to decide on future investments. Norway is also ordering four new submarines, with delivery of the first due in 2029.

    “It seems to me that we have some catching up to do, because we haven’t done it properly for the last 25 years,” said Sebastian Bruns, a senior researcher into maritime security at Kiel University’s Institute for Security Policy.

    Maps showing marine traffic through the Baltic

    “A WHOLE PIECE”

    Both developments show how the expanded alliance will reshape Europe’s security map. The region from the Baltic in the south to the high north may become almost an integrated operating area for NATO.

    “For NATO it’s quite important to have now the whole northern part, to see it as a whole piece,” Lieutenant Colonel Michael Maus from NATO’s Allied Command Transformation told Reuters. He chaired the working group which led Finland’s military integration into NATO.

    “With (existing) NATO nations Norway and Denmark, now we have a whole bloc. And thinking about potential defence plans, it’s for us a huge step forward, to consider it as a whole area now.”

    This became clear in May, when Finland hosted its first Arctic military exercise as a NATO member at one of Europe’s largest artillery training grounds 25 km above the Arctic Circle.

    The nearby town of Rovaniemi, known to tourists as the home of Santa Claus, is also the base of Finland’s Arctic air force and would serve as a military hub for the region in case of a conflict. Finland is investing some 150 million euros to renew the base to be able to host half a new fleet of 64 F-35 fighter jets, due to arrive from 2026.

    An undated artist’s rendition depicts divers and an unmanned vehicle exiting the A26 submarine. Saab AB/Handout via REUTERS

    For the May manoeuvres, nearly 1,000 allied forces from the United States, Britain, Norway and Sweden filled the sparse motorways as they joined some 6,500 Finnish troops and 1,000 vehicles.

    Captain Kurt Rossi, Field Artillery Officer of the U.S. Army, led a battery bringing in an M270 multiple rocket launcher.

    It was first shipped from Germany across the Baltic Sea, then trucked nearly 900 km to the north.

    “We haven’t been this close (to Russia) and been able to train up in Finland before,” Rossi said.

    If there was a conflict with Russia in the Baltic Sea area – where Russia has significant military capabilities at St. Petersburg and Kaliningrad – the shipping lane NATO used for that exercise would be vulnerable. Finland relies heavily on maritime freight for all its supplies – customs data shows almost 96% of its foreign trade is carried across the Baltic.

    The east-west railway link across the high north will open up an alternative, which could prove crucial.

    “I think the Russians can quite easily interrupt the cargo transportation by sea so basically this northern route is the only accessible route after that,” said Tuomo Lamberg, manager for cross border operations at Sweco, the Swedish company designing the electrification.

    Maps showing marine traffic through the Baltic

    “NOTHING BEATS THEM”

    But that risk, too, may recede when Sweden joins NATO.

    Down beneath the Baltic Sea waterline, the submarine commander Linden shows a reporter the captain’s quarters of the Gotland, one of four submarines currently in Sweden’s fleet, which will bring NATO’s total in the Baltic countries to 12 by 2028.

    The Kiel institute expects Russia to add one to three submarines in the coming years, to bring its Baltic submarine total to four, along with its fleet of around six modern warships. Its capabilities at Kaliningrad also include medium-range ballistic missiles.

    “This can be the loneliest place in the world,” says Linden, who captained the vessel for many years. On a typical mission, which lasts two to three weeks, there is no communication with headquarters, he said.

    The Gotlands, like Germany’s modern Type 212 submarines, will be among NATO’s most advanced non-nuclear submarines and can stay out of port for significantly longer than most other conventional models, the researcher Bruns said read more .

    “I would say, without a doubt, that the Gotland-class and the German Type 212 are the most capable non-nuclear submarines in the world,” said Bruns.

    “There is nothing that beats them, quite literally. In terms of how quiet they are, the engines they use, they are particularly quiet and very maneuverable.”

    In submarine warfare, Linden said, the primary question is where the adversary is. A careless crew member dropping a wrench or slamming a cupboard door can lead to detection.

    “We talk quietly on board,” Linden said. “You shouldn’t believe … films where orders are shouted.”

    The Gotland is based at Karlskrona, about 350 km across the Baltic from Kaliningrad. With an average of 1,500 vessels per day trafficking the Baltic according to the Commission on Security and Cooperation In Europe, it is one of the world’s busiest seaways – and there is really only one way out, the Kattegatt Sea between Denmark and Sweden.

    The shallow and crowded seaway can only be accessed through three narrow straits that submarines can’t pass through without being detected.

    LISTENING POWERS

    If any of the straits were to be closed, the sea freight traffic to Sweden and Finland would be hit hard and the Baltic states completely cut off. But with Sweden in the alliance, that becomes more preventable, because Sweden’s submarines will add to NATO’s listening powers.

    Linden says the Gotland’s crew can sometimes hear Russia’s vessels. The range of sound travel varies partly depending on the seasons. In winter, he said, you can hear as far as the island of Oeland – just a bit further than the distance between London and Birmingham in the UK.

    “You can lie outside Stockholm and hear the chain rattling on Oeland’s northern buoy,” Linden said. “In the summer you can hear maybe 3,000 meters.”

    By 2028, once Sweden takes delivery of a new design of vessel, this capacity will increase. The new design, known as A26, will allow submarine crews to deploy remotely operated vehicles (ROVs), combat divers or autonomous systems of some sort without putting the submarine or crew at risk, Bruns said.

    “Depending on the mission it could be an ROV that safeguards a pipeline or data cable, it could be combat divers that go ashore in the cover of darkness, it could be almost anything.”

    That capacity will increase Sweden’s scope to control comings and goings through the Baltic.

    “If you count all the forces, with Germany in the lead and Sweden and Finland coming on board, all those have really shifted the balance in the Baltic Sea quite significantly,” said Nick Childs, Senior Fellow for Naval Forces and Maritime Security at the International Institute for Strategic Studies.

    “It would make it very difficult for the Russian Baltic Sea fleet to operate in a free way,” he said. “But it could … still pose challenges for NATO.”

    Anne Kauranen reported from Tornio, Johan Ahlander from Karlskrona; additional reporting from Gwladys Fouche in Oslo, Jacob Gronholt-Pedersen in Copenhagen and Sabine Siebold in Brussels; Edited by Sara Ledwith

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  • Exclusive: Venezuela’s oil tankers at risk of sinking, fires, spills, report finds

    Exclusive: Venezuela’s oil tankers at risk of sinking, fires, spills, report finds

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    PUNTO FIJO, May 4 (Reuters) – More than half of the 22 oil tankers in Venezuela’s fleet are so run down that they should be immediately repaired or taken out of service, according to an internal report from state-run oil company PDVSA that was shared exclusively with Reuters.

    The report by PDVSA’s maritime branch, entitled “Critical deficiencies and risks of PDV Marina’s tanker fleet,” said years of deferred maintenance had left the entire fleet with “low levels of reliability,” at risk of spills, sinking, fires, collisions or flooding.

    “The ships currently lack seaworthiness classification and certifications by flag nations,” the report said.

    PDVSA and PDV Marina did not respond to requests for comment.

    The report, dated March 2023, was among eight documents shared with Reuters describing the state of PDVSA’s tanker fleet from the oil company’s corporate office, trading division and maritime branch, as well as Venezuela’s maritime authority. The existence of the documents has not been previously reported.

    Dated from Jan. 2022 to March this year, the documents detail the condition of the company’s tankers; the costs of chartering third-party vessels and the status of shipbuilding contracts with companies in Argentina and Iran.

    The deterioration of the fleet has forced PDVSA to charter tankers to move its oil, which provides the bulk of Venezuela’s hard currency, the analysis by PDVSA’s trade division said.

    PDVSA and the oil ministry did not respond to requests for comment.

    The reports were prepared amid a wide-ranging anti-corruption probe ordered by Venezuela’s President Nicolas Maduro last October after the discovery of billions of dollars in missing payments for petroleum exports. More than 60 people have been arrested and PDVSA’s chief executive and the nation’s oil minister have been replaced.

    The report from PDV Marina recommended withdrawing five tankers from active use; sending seven to shipyards for major repairs and installing transponders, fire extinguishers and communication equipment in others. No actions have been taken as the audit on the company’s operations continues.

    Five of PDVSA’s tankers are at least 30 years old, past their recommended lifespan, according to the PDV Marina report. The last major maintenance work on the fleet was five years ago, the report said.

    “The tanker fleet is showing a decline in the quality of its operations due to advanced physical deterioration, which implies higher maintenance and repair costs. Planning for sending the tankers to dry docks has been very affected by lack of payment to shipyards and providers,” the PDV Marina report said.

    Reuters has previously reported on an increase in tanker collisions, spill risks and fires in Venezuela.

    PDVSA leased 41 vessels last year, the documents said, paying about double the market rate, between $14,000 and $36,500 per day, to tanker owners willing to work with Venezuela despite U.S. sanctions imposed in 2019.

    DELAYED SHIPS

    At least four tankers ordered from foreign shipyards have been held up because of payment delays, cost increases and sanctions, according to the documents reviewed by Reuters.

    The audits ordered by PDVSA’s new CEO Pedro Tellechea as part of Maduro’s anti-corruption probe could bring further delays, a PDVSA executive said.

    “All contracts are frozen,” the executive said on condition of anonymity due to fear of retaliation. PDVSA’s legal and supply and trade departments are asking PDV Marina for documentation on the contracts, he added.

    Venezuela has paid shipyards in Iran and Argentina at least $300 million for six new vessels ordered as far back as 2005.

    It has taken delivery of only two of them, according to the documents.

    PDVSA has paid almost 80% of the $160 million due for two tankers from Rio Santiago shipyard in Argentina, the documents showed.

    Rio Santiago said it was not authorized to give information about that particular contract.

    In addition, PDVSA paid almost 157 million euros (about $173 million), or 63% of a 248 million euros contract (about $272 million) to U.S.-sanctioned Iran Marine Industrial Company (Sadra) for four tankers, according to the documents.

    Two of the four vessels were delivered after payment delays, difficulties with parts supplies and problems with insurance and certifications, according to the documents.

    The payment delays generated extra costs for demurrage, the documents said.

    Sadra did not reply to a request for comment.

    Reporting by Mircely Guanipa; Additional reporting by Marianna Parraga in Houston, Eliana Raszewski in Buenos Aires and Parisa Hafezi in Dubai; Editing by Gary McWilliams and Suzanne Goldenberg

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  • Exclusive: Chinese firm imported copper from Russian-controlled part of Ukraine

    Exclusive: Chinese firm imported copper from Russian-controlled part of Ukraine

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    • Data shows Quzhou Nova bought $7.4 mln of ingots
    • Copper plant is in Russian-annexed part of Ukraine
    • Area is subject to U.S. sanctions against Moscow
    • Russian ally China does not abide by U.S. measures

    April 14 (Reuters) – A Chinese company bought at least $7.4 million worth of copper alloy ingots from a plant in a Russian-annexed region of Ukraine that is subject to Western sanctions, according to Russian customs data reviewed by Reuters.

    China has not imposed any restrictions on trade with Russia, but the United States has threatened to blacklist companies round the world for violating its sanctions and warned Beijing against supplying Moscow with goods banned by U.S. export rules.

    The customs information, drawn from one commercial trade data provider and cross-checked with two others, show some of the first evidence of Chinese trades with Russian-annexed regions of Ukraine since the war began on Feb. 24, 2022.

    The Chinese firm, Quzhou Nova, bought at least 3,220 tons of copper alloy in ingots worth a total of $7.4 million from the Debaltsevsky Plant of Metallurgical Engineering between Oct. 8, 2022 and March 24, 2023, according to the data.

    The plant is located in the Donetsk region of eastern Ukraine, close to the border with Luhansk. Both Donetsk and Luhansk were among four Ukrainian regions that President Vladimir Putin claimed last September as part of Russia.

    Quzhou Nova, a trading and manufacturing company based in the city of Quzhou in the eastern province of Zhejiang, told Reuters it does not have any import and export business related to the trade of copper alloy in ingots.

    When Reuters showed details of the exports in the customs data to Quzhou Nova, the company said on March 23 that it “finds hard to understand the document, because this document is not stamped and signed”, and suggested contacting customs about the issue.

    The database, which collects information on all shipments worldwide, does not display stamps or signatures on its information.

    The Chinese customs service did not provide detailed information on imports. It said that “company trade data are not disclosed in our public information”.

    China imported copper and copper alloys worth $852 million from Russia between October and February, according to public customs statistics.

    A source at the Debaltsevsky plant, who spoke on condition of anonymity, said there was a non-ferrous metallurgy workshop on the territory of the factory. The source declined to comment on the issue of copper alloy shipments to China, saying the information was a “trade secret”.

    Contacted for comment, the Russian Federal customs service told Reuters that information on companies is confidential and is not disclosed by the service.

    When asked about the matter on Friday, the Kremlin said it did not know whether the Reuters news story about the transaction was true or what proof was available. The Kremlin said it had no information about the subject itself.

    The Debaltsevsky Plant did not respond to Reuters requests for comments by phone and in writing.

    Ukraine, its Western allies and an overwhelming majority of countries at the U.N. General Assembly have condemned Russia’s declared annexation of the four regions as illegal.

    SANCTIONS

    U.S. sanctions imposed on Feb. 21, 2022, three days before Russia invaded Ukraine, prohibit U.S imports from or exports to the so-called Donetsk and Luhansk People’s Republics.

    Two days later, the European Union announced measures including an import ban on goods from the two regions.

    While Chinese companies are free as far as their authorities are concerned to trade with firms in Russian-controlled regions of Ukraine, they do risk being added to Western blacklists.

    Asked about the copper shipments data, the U.S. State Department said it was concerned about China’s alignment with the Kremlin.

    “We have warned the PRC (People’s Republic of China) that assistance to Russia’s war effort would have serious consequences. We will not hesitate to move against entities, including PRC firms, that help Russia wage war against Ukraine or help Russia circumvent sanctions,” it added in a statement to Reuters, listing some Chinese companies already sanctioned.

    The European Commision did not respond to Reuters’ questions as to whether Chinese companies cooperated with the Russian-annexed Ukrainian territories and what risks such activity posed.

    China’s Ministry of Commerce did not respond to Reuters’ requests for comment about the shipments of copper alloys from the Debaltsevsky Plant or cooperation with businesses in the Donetsk region.

    The data seen by Reuters is based on shipping and customs documents like bill of lading and shipping bills and collected from several customs departments, government bodies and other partners.

    Quzhou Nova says it specialises in the export of wrapping paper. According to its website, it manufactures and trades goods for the tobacco industry, including paper, aluminium foil and polypropylene film.

    Reuters could not establish what use the copper alloy was intended for.

    The Ukrainian plant, located in the city of Debaltseve 70 km (45 miles) from the Russian-controlled Ukrainian city of Donetsk, specializes in making equipment and spare parts for ferrous metallurgy, the mining industry and cement plants, and has steelmaking and metal casting workshops, according to its website.

    Reuters was not able to find any data about the financial state of the company. It was added to the Russian state tax register in December 2022 and has yet to report financial data.

    According to a Ukrainian register, the legal status of the plant in Debaltseve has been suspended by the Ukrainian authorities. The register does not indicate when or why this happened.

    As of early 2023, its only owner was the Ukrainian Donetsk regional state administration.

    The Ukrainian government, as well as the Russian-appointed Donetsk People’s Republic administration, did not immediately comment to Reuters about cooperation with Chinese companies and shipments of goods to China.

    The copper alloy shipments from the plant were carried out via the port of Novorossiysk in southern Russia, according to the customs data.

    Reporting by Filipp Lebedev and Gleb Stolyarov in Tbilisi; Editing by Mark Trevelyan and Andrew Cawthorne

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  • Indian truckers say Hindenburg report a godsend in Adani dispute

    Indian truckers say Hindenburg report a godsend in Adani dispute

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    • India’s Adani reopens two cement plants after freight dispute
    • Truckers believe Hindenburg report was answer to their prayers
    • Adani says amicable resolution reached after negotiations

    DARLAGHAT, India Feb 23 (Reuters) – For truckers transporting cement from Adani’s factories in a hilly north Indian state, a U.S. short-seller’s critical research report on the giant conglomerate was a godsend they say helped them save their livelihoods.

    For weeks, around 7,000 truck owners and drivers in India’s Himachal Pradesh resorted to protest rallies against Adani’s Dec. 15 decision to shut two cement plants over a dispute on freight rates. Adani argued the plants were “unviable” at the trucking rates it wanted to slash by around half.

    On Monday, the Gautam Adani-led group said it had “amicably resolved” the issue with a 10-12% reduction in rates. Truckers rejoiced, with a union leader in a street address labelling it as a victory after late-night talks with Adani.

    The settlement comes four weeks after U.S.-based Hindenburg Research accused Adani of stock manipulation and improper use of tax havens, allegations the group called baseless.

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    The Jan. 24 report triggered a $140 billion rout in group’s stocks, sparked regulatory investigations and saw the billionaire Adani slip to 26 on the Forbes global rich list, from third.

    While the truckers’ settlement will have only a small impact on the overall Adani empire, it was a big win for the drivers and owners in a state were most people live on around $7 a day.

    The report “played a crucial role in our battle against India’s biggest business group, helped mobilize truckers and gain political support,” said Ram Krishan Sharma, one of the lead negotiators for protesting truckers.

    Adani negotiators had refused to budge for weeks. So Hindenburg’s report, some truckers believe, was godsent.

    Just a day before it was published, many truckers visited a small, revered Hindu temple in Darlaghat which overlooks one of Adani’s cement plants, and offered a traditional semolina sweet offering to a deity as they sought to resolve the dispute.

    Bantu Shukla, a protest leader, showed Reuters a photo and video of truckers that day offering prayers inside the temple. Some stood with folded hands, while a person rang a temple bell in a typical Hindu worship ritual.

    ‘AMICABLE RESOLUTION’

    Adani Group did not answer Reuters questions on whether the Hindenburg report’s fallout contributed to its decision in Himachal.

    Adani Cements in a statement said it was “grateful” to all stakeholders including the unions, the local state chief minister and other departments, adding the “amicable resolution” was in interest of everyone including the state.

    A source familiar with Adani’s negotiation said the group had been under pressure following what it thinks was a “negative campaign” by Adani’s opponents after the Hindenburg report, and the settlement to reopen plants is a relief.

    Himachal is ruled by Prime Minister Narendra Modi’s staunch rival, the Congress party. After the Hindenburg report, Congress has renewed its claims that Modi for years has unduly favoured Adani. Both Adani and India’s government deny that.

    The source added the move will also help Adani signal it can resolve commercial matters in states ruled by Modi’s rivals.

    Without citing Hindenburg, the Himachal chief minister’s office on Monday said “we have been successful in resolving the issues” to end the 67-day dispute.

    WHATSAPP CHATS, PRAYERS AT TEMPLE

    Adani became India’s second largest cement manufacturer when it acquired ACC (ACC.NS) and Ambuja Cements (ABUJ.NS) in a $10.5 billion deal with Swiss giant Holcim (HOLN.S) last year.

    In December, it shut plants in the villages of Gagal and Darlaghat in Himachal, saying truckers were charging too much.

    The Adani group wanted freight rates to be lowered to around 6 rupees ($0.0725) per tonne per km, from around 11 rupees. Many truckers told Reuters they struggled to make their loan repayments as their incomes shrank after the shutdowns.

    As a stalemate worsened, truckers formed WhatsApp groups to coordinate efforts, vent frustration and later share Hindenburg’s impact on Adani companies and stock prices to further drum up support.

    One such WhatsApp group chat of around 1,000 truckers, reviewed by Reuters, showed sharing of a local reporter’s video discussing the sharp fall in Adani’s shares and his alleged close ties to Modi.

    Although they accepted a small cut in freight rates when Adani agreed to pay 9.3-10.58 rupees per km per tonne, truckers felt they saved their jobs, and prayers at the Hindu temple were organised again this week.

    “We felt our deity had accepted our prayers when we saw the fall in the share prices of Adani companies,” protest leader Shukla said. “The Hindenburg report was a gift that saved our businesses.”

    (This story has been refiled to remove extraneous word in paragraph 20)

    Reporting by Manoj Kumar, Aditya Kalra and Anushree Fadnavis; Editing by Lincoln Feast.

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  • Indian shares fall ahead of inflation data; Adani stocks slide

    Indian shares fall ahead of inflation data; Adani stocks slide

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    BENGALURU, Feb 13 (Reuters) – Indian shares were off to a muted start on Monday, ahead of domestic retail inflation data due later in the day and U.S. inflation data due tomorrow, while the ongoing uncertainty and spillover effects from the Adani Group’s market rout continued to create an overhang.

    The Nifty 50 index (.NSEI) was down 0.29% at 17,804.60 as of 9:37 a.m. IST, while the S&P BSE Sensex (.BSESN) fell 0.35% to 60,472.28.

    Ten of the 13 major sectoral indexes declined, with information technology stocks (.NIFTYIT) falling nearly 2% amid worries of a growth slowdown in the U.S., from where they get a significant share of their revenue.

    On the flip side, metals (.NIFTYMET) gained with a 1% rise.

    Twenty-seven of Nifty 50 constituents advanced with Titan Co (TITN.NS) and Eicher Motors Ltd (EICH.NS) among top gainers.

    Wall Street equities closed lower on Friday, on fears of a longer-than-expected high-rate regime after hawkish comments from key Federal Reserve officials.

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    Asian markets fell, with the MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) sliding 0.63%.

    Investors await India’s retail inflation data for January, due today. A Reuters poll of economists showed that India’s annual retail inflation rose from a 12-month low in December, but stayed within the 6% upper limit of RBI’s tolerance band in January.

    The uncertainty over the Adani conglomerate added to concerns in domestic markets.

    “The Adani group saga continues to weigh on investors’ minds and hence the sentiment has been negative,” said Prashanth Tapse of Mehta Equities.

    The group has lost over $100 billion in market value since Jan. 24, when U.S. short-seller Hindenburg Research accused the conglomerate of stock manipulation and improper use of tax havens.

    India’s market regulator is probing the group’s links to some of the investors in its scrapped $2.5 billion share sale of the flagship Adani Enterprises.

    ($1 = 82.5250 Indian rupees)

    Reporting by Bharath Rajeswaran in Bengaluru; Editing by Janane Venkatraman, Nivedita Bhattacharjee

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  • Adani slashes growth targets amid rout sparked by Hindenburg – Bloomberg News

    Adani slashes growth targets amid rout sparked by Hindenburg – Bloomberg News

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    Feb 13 (Reuters) – India’s Adani Group has halved its revenue growth target and plans to scale down fresh capital expenditure, Bloomberg News reported on Sunday.

    Listed companies controlled by billionaire Gautam Adani have lost more than $100 billion in market value since Jan. 24, when U.S. short-seller Hindenburg Research accused the conglomerate of stock manipulation and improper use of offshore tax havens.

    The group has rejected the allegations and denied any wrongdoing.

    The Adani Group will now shoot for revenue growth of 15% to 20% for at least the next financial year, down from the original target of 40%, Bloomberg News said citing people familiar with the matter.

    Holding back on investments for even as little as three months could save the conglomerate as much as $3 billion, the report said, adding that the plans are still imminent.

    A spokesperson for the Adani Group said the report was “baseless, speculative”, without elaborating further.

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    The group has also been a part of India’s market regulator’s investigation into its links to some of the investors in its scrapped $2.5 billion share sale.

    Earlier this month, India’s ministry of corporate affairs started a preliminary review of the group’s financial statements and other regulatory submissions made over the years, Reuters reported, citing two senior government officials.

    Reporting by Mrinmay Dey in Bengaluru; Editing by Kim Coghill and Savio D’Souza

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  • Adani’s market losses top $100 bln as crisis shockwaves spread

    Adani’s market losses top $100 bln as crisis shockwaves spread

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    • Market rout deepens in Indian tycoon Adani’s shares
    • Adani Enterprises loses $26 bln in value since report
    • Falls after Adani pulled share sale, investors spooked
    • Analysts say signals confidence crisis in Indian market

    NEW DELHI/MUMBAI, Feb 2 (Reuters) – Adani’s market losses swelled above $100 billion on Thursday, sparking worries about a potential systemic impact a day after the Indian group’s flagship firm abandoned its $2.5 billion stock offering.

    Another challenge for Adani on Thursday came when S&P Dow Jones Indices said it would remove Adani Enterprises from widely used sustainability indices, effective Feb. 7, which would make the shares less appealing to sustainability-minded funds.

    In addition, India’s National Stock Exchange said it has placed on additional surveillance shares of Adani Enterprises <ADEL.NS>, Adani Ports <APSE.NS> and Ambuja Cements <ABUJ.NS>. read more

    However, Adani Group Chairman Gautam Adani is in talks with lenders to prepay and release pledged shares as he seeks to restore confidence in the financial health of his conglomerate, Bloomberg News reported on Thursday. read more

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    The shock withdrawal of Adani Enterprises’ share sale marks a dramatic setback for founder Adani, the school dropout-turned-billionaire whose fortunes rose rapidly in recent years but have plunged in just a week after a critical research report by U.S.-based short-seller Hindenburg Research.

    Aborting the share sale sent shockwaves across markets, politics and business. Adani stocks plunged, opposition lawmakers called for a wider probe and India’s central bank sprang into action to check on the exposure of banks to the group. Meanwhile, Citigroup’s (C.N) wealth unit stopped making margin loans to clients against Adani Group securities.

    The crisis marks an dramatic turn of fortune for Adani, who has in recent years forged partnerships with foreign giants such as France’s TotalEnergies (TTEF.PA) and attracted investors such as Abu Dhabi’s International Holding Company as he pursues a global expansion stretching from ports to the power sector.

    In a shock move late on Wednesday, Adani called off the share sale as a stocks rout sparked by Hindenburg’s criticisms intensified, despite it being fully subscribed a day earlier.

    “Adani may have started a confidence crisis in Indian shares and that could have broader market implications,” said Ipek Ozkardeskaya, senior market analyst at Swissquote Bank.

    Adani Enterprises shares tumbled 27% on Thursday, closing at their lowest level since March 2022.

    Other group companies also lost further ground, with 10% losses at Adani Total Gas (ADAG.NS), Adani Green Energy (ADNA.NS) and Adani Transmission (ADAI.NS), while Adani Ports and Special Economic Zone shed nearly 7%.

    Since Hindenburg’s report on Jan. 24, group companies have lost nearly half their combined market value. Adani Enterprises – described as an incubator of Adani’s businesses – has lost $26 billion in market capitalisation.

    Adani is also no longer Asia’s richest person, having slid to 16th in the Forbes rankings of the world’s wealthiest people, with his net worth almost halved to $64.6 billion in a week.

    The 60-year-old had been third on the list, behind billionaires Elon Musk and Bernard Arnault.

    His rival Mukesh Ambani of Reliance Industries (RELI.NS) is now Asia’s richest person.

    [1/4] Indian billionaire Gautam Adani addresses delegates during the Bengal Global Business Summit in Kolkata, India April 20, 2022. REUTERS/Rupak De Chowdhuri

    Reuters Graphics

    BROADER CONCERNS

    Adani’s plummeting stock and bond prices have raised concerns about the likelihood of a wider impact on India’s financial system.

    India’s central bank has asked local banks for details of their exposure to the Adani Group, government and banking sources told Reuters on Thursday.

    CLSA estimates that Indian banks were exposed to about 40% of the $24.5 billion of Adani Group debt in the fiscal year to March 2022.

    Dollar bonds issued by entities of Adani Group extended losses on Thursday, with notes of Adani Green Energy crashing to a record low. Adani Group entities made scheduled coupon payments on outstanding U.S. dollar-denominated bonds on Thursday, Reuters reported citing sources.

    “We see the market is losing confidence on how to gauge where the bottom can be and although there will be short-covering rebounds, we expect more fundamental downside risks given more private banks (are) likely to cut or reduce margin,” said Monica Hsiao, chief investment officer of Hong Kong-based credit fund Triada Capital.

    In New Delhi, opposition lawmakers submitted notices in parliament demanding discussion of the short-seller’s report.

    The Congress Party called for a Joint Parliamentary Committee be set up or a Supreme Court monitored investigation, while some lawmakers shouted anti-Adani slogans inside parliament, which was adjourned for the day.

    ADANI VS HINDENBURG

    Adani made acquisitions worth $13.8 billion in 2022, Dealogic data showed, its highest ever and more than double the previous year.

    The cancelled fundraising was critical for Adani, which had said it would use $1.33 billion to fund green hydrogen projects, airports facilities and greenfield expressways, and $508 million to repay debt at some units.

    Hindenburg’s report alleged an improper use of offshore tax havens and stock manipulation by the Adani Group. It also raised concerns about high debt and the valuations of seven listed Adani companies.

    The Adani Group has denied the accusations, saying the allegation of stock manipulation had “no basis” and stemmed from an ignorance of Indian law. It said it has always made the necessary regulatory disclosures.

    Adani had managed to secure share sale subscriptions on Tuesday even though the stock’s market price was below the issue’s offer price. Maybank Securities and Abu Dhabi Investment Authority had bid for the anchor portion of the issue, investments which will now be reimbursed by Adani.

    Late on Wednesday, the group’s founder said he was withdrawing the sale given the share price fall, adding his board felt going ahead with it “will not be morally correct”.

    Reporting by Chris Thomas, Nallur Sethuraman, Tanvi Mehta, Ira Dugal, Aftab Ahmed, Sumeet Chatterjee, Anshuman Daga, Summer Zhen, Ross Kerber and Bansari Mayur Kamdar; Editing by Muralikumar Anantharaman, Jason Neely and Alexander Smith

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  • Adani crisis ignites Indian contagion fears, credit warnings

    Adani crisis ignites Indian contagion fears, credit warnings

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    • Both houses of parliament adjourned amid row
    • Flagship Adani firm plunges 35% at one point
    • Moody’s warns will find it harder to raise capital

    NEW DELHI, Feb 3 (Reuters) – Financial contagion fears spread in India on Friday as the Adani Group’s crisis worsened, with ratings agency Moody’s warning the conglomerate may struggle to raise capital and S&P cutting the outlook on two of its businesses.

    Chaotic scenes in both houses of India’s parliament led to their adjournment on Friday as some lawmakers demanded an inquiry after a dramatic meltdown in the stock market values of Indian billionaire Gautam Adani’s companies.

    The crisis was triggered by a Hindenburg Research report last week in which the U.S.-based short-seller accused the Adani Group of stock manipulation and unsustainable debt.

    Adani Group, one of India’s top conglomerates, has rejected the criticism and denied wrongdoing in detailed rebuttals, but that has failed to arrest the unabated fall in its shares.

    In the latest sign of the crisis widening, India’s ministry of corporate affairs has begun a preliminary review of Adani Group’s financial statements and other regulatory submissions made over the years, two government officials told Reuters.

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    Although shares in Adani companies recovered after sharp falls earlier on Friday, the seven listed firms have still lost about half their market value, totalling more than $100 billion since Hindenburg published its report on Jan. 24.

    Moody’s warned the share plunge could hit the Adani Group’s ability to raise capital, although fellow credit ratings agency Fitch saw no immediate impact on its ratings.

    “These adverse developments are likely to reduce the group’s ability to raise capital to fund committed capex or refinance maturing debt over the next 1-2 years. We recognise that a portion of the capex is deferrable,” Moody’s said.

    For Adani, a former school drop-out from Gujarat, the western home state of Indian Prime Minister Narendra Modi, the crisis presents the biggest reputational and business challenge of his life, as his firm struggles to assuage investor concerns.

    Amid fears the turmoil could spill over into the broader financial system, some Indian politicians have called for a wider investigation, and sources have told Reuters the central bank has asked lenders for details of exposure to the group.

    “Contagion concerns are widening, but still limited to the banking sector,” Charu Chanana, a market strategist with Saxo Markets in Singapore, said on Friday.

    The Reserve Bank of India said the country’s banking system remains resilient and stable. State Bank of India said it was not concerned about the exposure to Adani Group, but further financing to its projects would be “evaluated on its own merit”.

    Adani Enterprises shares closed 1.4% higher, after earlier slumping 35% to hit their lowest since March 2021. That low took its losses to nearly $33.6 billion since last week, a 70% fall.

    Shares fell 5% in Adani Total Gas (ADAG.NS), a joint venture with France’s TotalEnergies (TTEF.PA), which said its exposure to Adani companies was limited.

    Traffic moves past the logo of the Adani Group installed at a roundabout on the ring road in Ahmedabad, India, Feb. 2, 2023. REUTERS/Amit Dave

    Adani Ports and Special Economic Zone (APSE.NS) was up 8%, while Adani Transmission (ADAI.NS) and Adani Green Energy (ADNA.NS) were both down 10%.

    “There is a risk that investor concerns about the group’s governance and disclosures are larger than we have currently factored into our ratings,” S&P said, as it cut its outlook on Adani Ports and Adani Electricity to negative from stable.

    India’s divestment secretary Tuhin Kanta Pandey told Reuters that Life Insurance Corp (LIC) shareholders and customers should not be concerned about its exposure to the Adani Group.

    State-run LIC (LIFI.NS) has a 4.23% stake in the flagship Adani Enterprises, while its other exposures include a 9.14% stake in Adani Ports.

    Reuters Graphics

    ‘ONE INSTANCE’

    Adani, 60, has in recent years forged partnerships with, and attracted investment from, foreign giants as he pursued global expansion in industries from ports to power.

    The market and financial crisis means foreign investors, many already underweight on India as they consider its stock market overpriced, are reducing exposure.

    “One instance, however much talked about globally it may be … is not going to be indicative of how well Indian financial markets are governed,” Indian Finance Minister Nirmala Sitharaman told Network18 when asked about the market weakness.

    Reuters Graphics

    Hindenburg’s report said key listed Adani companies had “substantial debt” and shares in the seven listed firms had a downside of 85% due to what it called sky-high valuations.

    The Adani Group has called the report baseless and said over the past decade, its companies have “consistently de-levered”.

    The listed Adani firms now have a combined market value of $107.5 billion, versus $218 billion before the report.

    That has forced Adani to cede the crown of Asia’s richest person to Indian rival Mukesh Ambani of Reliance Industries Ltd (RELI.NS), and he has slid to 17th in Forbes’ list of the world’s wealthiest people.

    He had ranked third, behind Elon Musk and Bernard Arnault.

    Reporting by Aditya Kalra, Chris Thomas, Ankur Banerjee, Bansari Mayur Kamdar, Shivam Patel, Tanvi Mehta and Rae Wee in Singapore; Editing by Clarence Fernandez, Mark Potter and Alexander Smith

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  • Southwest Airlines is sued for not providing refunds after meltdown

    Southwest Airlines is sued for not providing refunds after meltdown

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    NEW YORK, Jan 3 (Reuters) – Southwest Airlines (LUV.N) has been sued by a passenger who said it failed to provide refunds to passengers left stranded when an operational meltdown led the carrier to cancel more than 15,000 flights late last month.

    In a proposed class action filed on Dec. 30 in New Orleans federal court, Eric Capdeville accused Southwest of breach of contract after a fierce winter storm that swept across the United States shortly before Christmas upended the carrier’s schedule.

    Though Southwest has promised to reimburse passengers for expenses, Capdeville said it offered only a credit to him and his daughter after scrapping their Dec. 27 flight to Portland, Oregon from New Orleans and being unable to book alternative travel.

    Affected passengers “cannot use their airline tickets through no fault of their own and they are not getting the benefit of their bargain with defendant,” the complaint said.

    Capdeville, a Marrero, Louisiana resident, is seeking damages for passengers on Southwest flights canceled since Dec. 24, and who did not receive refunds or expense reimbursements.

    In a statement on Tuesday, Southwest had no comment on the lawsuit, but said it had “several high priority efforts underway to do right by our customers, including processing refunds from canceled flights, and reimbursing customers for expenses incurred as a result of the irregular operations.”

    Capdeville’s lawyer did not immediately respond to requests for additional comment.

    The meltdown at Dallas-based Southwest has been blamed on staffing shortages and outdated flight scheduling software.

    Southwest has said it would reimburse affected passengers for reasonable expenses such as last-minute hotel, rental car and dining costs, but it might take several weeks.

    The carrier largely restored normal operations on Dec. 30, several days after other airlines had recovered from the storm.

    In a Dec. 29 letter to Southwest Chief Executive Bob Jordan, Transportation Secretary Pete Buttigieg called the disruptions “unacceptable” and said the law requires refunds when carriers cancel flights unless passengers accept rebooking.

    The case is Capdeville v Southwest Airlines Co, U.S. District Court, Eastern District of Louisiana, No. 22-05590.

    Reporting by Jonathan Stempel in New York; Editing by Nick Zieminski

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  • Taliban bans female NGO staff, jeopardizing aid efforts

    Taliban bans female NGO staff, jeopardizing aid efforts

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    • Taliban orders NGOs to stop female staff from working
    • Comes after suspension of female students from universities
    • U.N. says order would seriously impact humanitarian operations
    • U.N. plans to meet with Taliban to seek clarity

    KABUL, Dec 24 (Reuters) – Afghanistan’s Taliban-run administration on Saturday ordered all local and foreign NGOs to stop female employees from working, in a move the United Nations said would hit humanitarian operations just as winter grips a country already in economic crisis.

    A letter from the economy ministry, confirmed by spokesperson Abdulrahman Habib, said female employees of non-governmental organisations (NGOs) were not allowed to work until further notice because some had not adhered to the administration’s interpretation of Islamic dresscode for women.

    It comes days after the administration ordered universities to close to women, prompting global condemnation and sparking some protests and heavy criticism inside Afghanistan.

    Both decisions are the latest restrictions on women that are likely to undermine the Taliban-run administration’s efforts to gain international recognition and clear sanctions that are severely hampering the economy.

    U.S. Secretary of State Antony Blinken said on Twitter he was “deeply concerned” the move “will disrupt vital and life-saving assistance to millions,” adding: “Women are central to humanitarian operations around the world. This decision could be devastating for the Afghan people.”

    Ramiz Alakbarov, the U.N. deputy special representative for Afghanistan and humanitarian coordinator, told Reuters that although the U.N. had not received the order, contracted NGOs carried out most of its activities and would be heavily impacted.

    “Many of our programmes will be affected,” he said, because they need female staff to assess humanitarian need and identify beneficiaries, otherwise they will not be able to implement aid programs.

    International aid agency AfghanAid said it was immediately suspending operations while it consulted with other organisations, and that other NGOs were taking similar actions.

    The potential endangerment of aid programmes that millions of Afghans access comes when more than half the population relies on humanitarian aid, according to aid agencies, and during the mountainous nation’s coldest season.

    “There’s never a right time for anything like this … but this particular time is very unfortunate because during winter time people are most in need and Afghan winters are very harsh,” said Alakbarov.

    He said his office would consult with NGOs and U.N. agencies on Sunday and seek to meet with Taliban authorities for an explanation.

    Aid workers say female workers are essential in a country where rules and cultural customs largely prevent male workers from delivering aid to female beneficiaries.

    “An important principle of delivery of humanitarian aid is the ability of women to participate independently and in an unimpeded way in its distribution so if we can’t do it in a principled way then no donors will be funding any programs like that,” Alakbarov said.

    When asked whether the rules directly included U.N. agencies, Habib said the letter applied to organisations under Afghanistan’s coordinating body for humanitarian organisations, known as ACBAR. That body does not include the U.N., but includes over 180 local and international NGOs.

    Their licences would be suspended if they did not comply, the letter said.

    Afghanistan’s struggling economy has tipped into crisis since the Taliban took over in 2021, with the country facing sanctions, cuts in development aid and a freeze in central bank assets.

    A record 28 million Afghans are estimated to need humanitarian aid next year, according to AfghanAid.

    Reporting by Kabul newsroom; additional reporting by Susan Heavey in Washington
    Editing by Mark Potter and Josie Kao

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  • U.N. General Assembly calls for Russia to make reparations in Ukraine

    U.N. General Assembly calls for Russia to make reparations in Ukraine

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    Nov 14 (Reuters) – The United Nations General Assembly on Monday called for Russia to be held accountable for its conduct in Ukraine, voting to approve a resolution recognizing that Russia must be responsible for making reparations to the country.

    The resolution, supported by 94 of the assembly’s 193 members, said Russia, which invaded its neighbor in February, “must bear the legal consequences of all of its internationally wrongful acts, including making reparation for the injury, including any damage, caused by such acts.”

    The resolution recommends that member states, in cooperation with Ukraine, create an international register to record evidence and claims against Russia.

    General Assembly resolutions are nonbinding, but they carry political weight.

    Ukrainian President Volodymyr Zelenskiy called the resolution an “important” one.

    “The reparations that Russia will have to pay for what it has done are now part of the international legal reality,” Zelenskiy said in his nightly video address.

    Kyiv’s Ambassador to the U.N. Sergiy Kyslytsya told the General Assembly before the vote that Russia has targeted everything from factories to residential buildings and hospitals.

    “Ukraine will have the daunting task of rebuilding the country and recovering from this war, but that recovery will never be complete without a sense of justice for the victims of the Russian war. It is time to hold Russia accountable,” Kyslytsya said.

    The United Nations headquarters building is pictured with a UN logo in the Manhattan borough of New York City, New York, U.S., March 1, 2022. REUTERS/Carlo Allegri

    Russia’s U.N. Ambassador Vassily Nebenzia told the General Assembly before the vote that the provisions of the resolution are “legally null and void” as he urged countries to vote against it.

    “The West is trying to draw out and worsen the conflict and plans to use Russian money for it,” Nebenzia said.

    Former Russian President Dmitry Medvedev, now deputy chairman of Russia’s Security Council, said on the Telegram messaging app that the “Anglo-Saxons are clearly trying to scrape together a legal basis for the illegal seizure of Russian assets.”

    Fourteen countries voted against the resolution, including Russia, China and Iran, while 73 abstained, including Brazil, India and South Africa. Not all member states voted.

    In March, 141 members of the General Assembly voted to denounce Russia’s invasion, and 143 in October voted to condemn Moscow’s attempted annexation of parts of Ukraine.

    Zelenskiy on Saturday said Russian forces destroyed critical infrastructure in the strategic southern city of Kherson before fleeing. Moscow denies deliberately targeting civilians, although the invasion has reduced Ukrainian cities to rubble and killed or wounded thousands.

    “It will take a broad international effort to support Ukraine’s recovery and reconstruction in order to build a safe and prosperous future for the Ukrainian people,” Britain’s U.N. Ambassador Barbara Woodward told the assembly.

    “But only one country, Russia, is responsible for the damage to Ukraine, and it is absolutely right, as this resolution sets out, that Russia pay for that damage.”

    Reporting by Daphne Psaledakis and Doina Chiacu in WASHINGTON; Additional reporting by Oleksandr Kozhukhar in Kyiv and Lidia Kelly in Melbourne; editing by Grant McCool

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