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Counterpoint

Why did US President Trump halt anti-bribery law?

Why did US President Trump halt anti-bribery law?

The law was used to go after the Adani Group under the previous Biden administration

Staff Writer

US President Donald Trump has ordered a pause in the enforcement of a nearly half-century-old law that was used to go after the Adani Group under the previous Biden administration.

The Foreign Corrupt Practices Act (FCPA) bans firms and people with US ties from offering money or gifts to foreign officials to secure business overseas.

President Trump had considered pausing the law during his first term.

“It sounds good on paper, but in [practice] it’s a disaster,” President Trump said on the FCPA, the British daily, “Financial Times”, reported. “It means that if an American goes over to a foreign country and starts doing business over there legally, legitimately or otherwise, it's almost a guaranteed investigation, indictment and nobody wants to do business with the Americans because of it.”

The order marks one of the boldest enforcement policies issued by the Trump administration, “FT” reported.

“… Over-expansive and unpredictable FCPA enforcement against American citizens and businesses — by our own Government — for routine business practices in other nations not only wastes limited prosecutorial resources that could be dedicated to preserving American freedoms, but actively harms American economic competitiveness and, therefore, national security,” the White House said in a statement on pausing the FCPA.

“It is therefore the policy of my Administration to preserve the Presidential authority to conduct foreign affairs and advance American economic and national security by eliminating excessive barriers to American commerce abroad,” President Trump's executive order said.
The executive order that President Trump signed asked the US Attorney General to “review in detail all existing FCPA investigations or enforcement actions and take appropriate action with respect to such matters to restore proper bounds on FCPA enforcement and preserve Presidential foreign policy prerogatives”.

Following the executive order to pause the enforcement of the FCPA, stocks of all Adani Group firms saw substantial gains on 11 February. The most notable gainer was Adani Enterprises Ltd, whose stock rose 4.28 per cent. Following closely was Adani Power Ltd, which rose 4.17 per cent to Rs 511.90 apiece.

Adani Green Energy Ltd was the third top gainer, as it rose 3.34 per cent to Rs 985.90 apiece. New Delhi Television Ltd (NDTV) stock rose 3.84 per cent to Rs 145 apiece. The shares of Adani Energy Solutions Ltd, Adani Total Gas Ltd, and Adani Ports and Special Economic Zone Ltd also saw gains.

On 10 February, six US Congressmen in a letter to Attorney General Pam Bondi said the previous Department of Justice's (DoJ) action was a “misguided crusade” that came at the “risk of harming” America's relationship with a “strategic geopolitical partner” like India.

They called it one of the “unwise decisions” by the Biden administration.

“This case rests on the allegation that preparations were made by members of this company in India to bribe Indian officials, also exclusively located in India. Instead of deferring the case to the appropriate Indian authorities, the Biden DoJ decided to push forward and indict the company's executives without any real injury to US interests being present,” the six Congressmen said.

Earlier, the Adani Group — the largest and fastest-growing portfolio of diversified businesses in India — had last year strongly denied allegations by the Biden administration that some company officials were part of an alleged scheme to pay over $250 million bribe to Indian officials in exchange for favourable terms for solar power contracts.

The Adani Group has interests in logistics (seaports, airports, logistics, shipping and rail), resources, power generation and distribution, renewable energy, gas and infrastructure, agro (commodities, edible oil, food products, cold storage and grain silos), real estate, public transport infrastructure, consumer finance and defence, and other sectors.

Categories
Corporate

Tata Motors expects gradual improvement in domestic demand

Tata Motors expects gradual improvement in domestic demand

In the passenger vehicle segment, the company’s revenue declined by 4.3% year-on-year to Rs 12,400 crore

Staff Writer

Tata Motors is expecting a gradual improvement in terms of demand in the fourth quarter of FY25, a top official said on Wednesday. The company reported a 22% year-on-year decline in its net profit to Rs 5,451 crore in the third quarter of FY25, as against Rs 7,025 crore in the same period last year. The automaker's revenue from operations improved marginally by 2.7% to Rs 1.16 lakh crore as against Rs 1.11 lakh crore in the same period last year. 

In the passenger vehicle segment, the company’s revenue declined by 4.3% year-on-year to Rs 12,400 crore, whereas the segment’s EBITDA improved by 120 basis points. In the commercial vehicle segment, the company’s revenue declined by 8.4% year-on-year to Rs 18,400 crore. 

“I think if you look at the domestic situation, the decline in revenues that you saw for us in the commercial vehicle side, while market shares have inched up in the heavy will give you a signal that the demand for in Q3 has not been as great as you'd have expected. The festive season has been good, but thereafter the demand has been weak owing to a combination of factors such as tight liquidity,” says P Balaji, Group CFO, Tata Motors.

According to Balaji, though the quarter has not witnessed great growth, demand can bounce back once the consumption is turbocharged. For the domestic automobile industry, the January to March quarter is generally strong, he said.

“On the domestic side, we expect a gradual improvement in demand on a combination of factors. We believe the infrastructure investments will continue this year. And we also have our product actions that are also going through. So domestically, we believe this gradual improvement in demand will continue into Q4,” Balaji said. 

Notably, the company’s passenger vehicle and commercial vehicle business is slated for demerger in October 2025. 

Meanwhile, the company’s revenue for Jaguar Land Rover improved marginally by 1.5% to £7.5 billion in the third quarter, with EBIT margin expanding by 20 basis points, the highest in a decade. JLR’s EBITDA however declined by 200 basis points. The company expects to achieve its profitability and cash flow targets in FY25, with EBIT margin ≥8.5% and positive net cash. 

Balaji maintains that while the US and UK continue to be the biggest markets for JLR, the company will remain watchful in China. “We do continue to remain watchful in China. And the reason why we do see stress in China overall, at an industry level, I think the premium market is down almost 14% for the year from April to December this year. And in that, if you look at the JLR import business, we are doing much better. It only declined about 5% in that business. So, therefore, we believe that the intervention that we've been making in the Chinese market is helping us to get into the industry,” says Balaji. 

Concerning the possibility of tariffs on automotive imports by the Trump administration, Balaji said that the company is closely monitoring the situation. “Currently we need to wait for clarity to emerge on that. And as far as the UK is concerned, I think the UK dollars of payment vis a vis the US is the other way around. US exports, more to the UK than the other way around. And therefore, we'll need to watch and see how that plays out. There's nothing concrete at this point. In any case, we will have to continue to drive all degrees, all the levers that we have both on the demand side and the cost side to navigate whatever comes our way,” says Balaji.

Categories
Counterpoint

Adani Group denies cancellation of Sri Lanka power purchase deal, says it is committed to invest $1 bn for green projects

Adani Group denies cancellation of Sri Lanka power purchase deal, says it is committed to invest $1 bn for green projects

Adani Green Energy's stock experienced a decline following the news of Sri Lanka's termination of the power purchase agreement, reaching a daily low of Rs 1,008

Staff Writer

The Adani Group, led by Gautam Adani, has clarified that the reports of Sri Lanka officially revoking a power purchase agreement with the Indian conglomerate due to corruption allegations are inaccurate and deceptive.

Early in the day news agency AFP reported that Sri Lankan President Anura Kumara Dissanayake's administration conducted an investigation into the Adani group's local projects following allegations of bribery and concealing payments from investors by the US on November 19, 2024.

Clarifying the news report, the Adani Group issued a statement: "Reports that Adani’s 484 MW wind power projects in Mannar and Pooneryn have been cancelled are false and misleading. We categorically state that the PPA has not been revoked. The Sri Lankan Cabinet’s decision of 2 Jan 2025 to reevaluate the tariff approved in May 2024 is part of a standard review process, particularly with a new government, to ensure that the terms align with their current priorities and energy policies. Adani remains committed to investing $1 billion in Sri Lanka’s green energy sector, driving renewable energy and economic growth."

Adani Green Energy's stock experienced a decline following the news of Sri Lanka's termination of the power purchase agreement, reaching a daily low of Rs 1,008. Shares of Adani Green Energy were down by 0.93% and closed at Rs 1,011.95.

In May 2024, the former government in Sri Lanka had reached a deal to purchase electricity at a rate of US$0.0826 per kilowatt from an Adani wind power facility planned for construction in the northwest region of the island in the country.

Opposition to the agreement came from activists who believed that smaller renewable energy projects were able to provide electricity at a significantly lower cost compared to Adani's proposal.

Furthermore, the planned development of Adani's 484-megawatt wind power plant in the coastal areas of Mannar and Pooneryn is currently being challenged in the Supreme Court on grounds of environmental concerns.

Categories
Leaders

90-hour work week: Elon Musk, Aadit Palicha, Shantanu Deshpande all wanted more hours on job

90-hour work week: Elon Musk, Aadit Palicha, Shantanu Deshpande all wanted more hours on job

In India, a 48-hour work week is a norm and any additional hours are classified as overtime as per the country's labour regulations.

Staff Writer

In less than 48 hours, SN Subrahmanyan, Chairman of L&T, received strong criticism for his recent comments regarding working hours. A video of him discussing the need for employees to work 90 hours per week, even on Sundays, in order to maintain competitiveness, has gone viral. This video, in which Subrahmanyan addresses a query about mandatory Saturday work, has sparked controversy among viewers regarding the impact of such a work culture on the mental health of employees.

In the video, Subrahmanyan had responded to an employee's question about mandated working on Saturdays by saying: “I regret I am not able to make you work on Sundays, to be honest. If I can make you work on Sundays, I will be more happy because I work on Sundays also… What do you do sitting at home? How long can you stare at your wife? Come on, get to the office and start working.”

Unfortunately, Subrahmanyan is not the first industry leader to propose extended work hours in India, where a 48-hour work week is a norm and any additional hours are classified as overtime as per the country's labour regulations. Earlier, Infosys co-founder Narayana Murthy had suggested a 70-hour work week for Indians. But here are more names who wanted the workers to slog it out.

Tesla CEO Elon Musk promoted the idea of long working hours and eliminated remote work across all his companies last year. According to Musk, putting in 80 to 100-hour weeks consistently can increase the chances of success. 

Musk emphasized that working more than the standard 40-hour week can lead to achieving greater results. In a tweet, he stated that significant changes and world-altering innovations are not made by working just 40 hours a week.

"There are way easier places to work, but nobody ever changed the world on 40 hours a week," Musk first said in 2018. 

In a 2023 interview, NR Narayana Murthy, the founder of Infosys, suggested that in order for India to be competitive with economies that have seen significant growth in the past few decades, young people should commit to working 70 hours a week. 

He emphasized the need to enhance work productivity in India, calling it one of the lowest in the world. Addressing issues such as government corruption, bureaucratic delays, and decision-making inefficiencies, he underscored the importance of overcoming these obstacles to succeed globally. 

Drawing from his own experience of working 85-90 hours a week until retirement, the 78-year-old entrepreneur urged the younger generation to prioritize their commitment to the country by dedicating themselves to long hours of work.

“India’s work productivity is one of the lowest in the world. Unless we improve our work productivity, unless we reduce corruption in the government at some level, because we have been reading I don’t know the truth of it, unless we reduce the delays in our bureaucracy in taking this decision, we will not be able to compete with those countries that have made tremendous progress,” he said.

Jack Ma, the co-founder of Alibaba, expressed support for China's "996" work schedule, which consists of working from 9 a.m. to 9 p.m. six days a week. In 2019, Ma referred to this schedule as a "tremendous opportunity," suggesting that individuals who are passionate about their careers view the ability to work extended hours as a privilege.

Despite facing criticism for advocating for excessive work hours, Ma contended that those who are truly dedicated to their work would not view the "996" schedule as a burden. According to him, achieving success requires unwavering commitment and a willingness to endure temporary discomfort in pursuit of long-term objectives

Ola CEO Bhavish Aggawal also expressed his support for NR Narayana Murthy's proposal of a 70-hour work week, dismissing the concept of work-life balance as a Western idea. Despite facing backlash on social media for endorsing Murthy's views, Aggarwal remained steadfast in his belief that hard work and sacrifice are necessary in order to propel India towards becoming the top country in the world. 

In a podcast discussion, he said: "I received criticism for publicly supporting Mr. Murthy's statement, but I remain undeterred in my conviction that dedication and perseverance are essential for achieving our goal of becoming the leading economy."

Aadit Palicha, the 22-year-old co-founder and CEO of Zepto, acknowledged in a statement last year that his team dedicates a significant amount of time to their work, putting in 80-100 hours per week. He noted that, in hindsight, they could have achieved the same results with less stress by working half the hours. Palicha emphasized that beyond a certain point, the pursuit of money becomes less important. He attributed his team's willingness to work long hours to their passion for building Zepto and the thrill of the challenge. 

Candidly, working 80-100 hours a week, we could have probably worked half of that with a lot less stress… At a certain point, money becomes inconsequential,” he said.

In a recent LinkedIn post, Shantanu Deshpande, CEO of Bombay Shaving Company, emphasized the importance of dedicating oneself to work during the initial years of one's career. Deshpande advised young professionals to prioritize their work over leisure activities, putting in long hours and focusing on their professional development. 

Deshpande wrote: “When you are 22 and new in your job, throw yourself into it. Eat well and stay fit, but put in the 18 hour days for at least 4-5 years. I see a LOT of youngsters who watch random content all over and convince themselves that ‘work life balance, spending time with family, rejuvenation bla bla’ is important. It is, but not that early. That early, worship your work… Don’t do random rona-dhona. Take it on the chin and be relentless. You will be way better for it.”

Later, he apologised: “To those who were hurt by my post – apologies for the same. I recognise the need for nuance and context.”

The idea that longer working hours directly correlate with higher productivity and economic growth is challenged by recent research. Narayan Murthy said that India should emulate China, known for its average annual working hours of 2,169 and a GDP per capita of $14,129. However, data from Our World In Data suggests that factors such as development levels and industry play a more significant role in a country's economic output.

Countries like India and Bangladesh, where people work longer hours than in Western countries, have lower GDP per capita figures. For instance, Indians work an average of 2,123 hours annually but have a GDP per capita of $6,711, indicating that simply working longer hours does not necessarily lead to economic prosperity.

Furthermore, alternative research, such as a study from Stanford University, contradicts the notion that longer working hours contribute to greater economic prosperity and productivity. In fact, the study shows that working more than 49 hours a week can actually lead to a decrease in workforce productivity.