What’s in today’s article?

• Why in News?
• AUKUS partnership

Why in News?

Australia has signed a deal with the United States and Britain to exchange nuclear secrets and materials, advancing its plan to equip its navy with nuclear-powered submarines as part of the 2021 AUKUS security accord.

This agreement binds the three countries to secure arrangements for transferring sensitive nuclear material and know-how.

AUKUS partnership

• About
  • Signed in September 2021, the new enhanced trilateral security partnership between Australia, the United Kingdom, and the United States is named as “AUKUS”.
• This is a trilateral defence deal for Indo-Pacific.
  • The first major initiative of AUKUS would be to deliver a nuclear-powered submarine fleet for Australia.
  • These countries, however, made it clear that their aim is not to arm the new submarines with nuclear weapons.
  • This is because Australia is a signatory to the Nuclear Non-proliferation Treaty (NPT) which bans it from acquiring or deploying nuclear weapons.
• Key highlights of the deal
  • Under the deal, the United States intends to sell Australia three US Virginia class nuclear-powered submarines, in the early 2030s, with an option for Australia to buy two more if needed.
  • The multi-stage project would culminate with British and Australian production and operation of a new submarine class – SSN-AUKUS.
• SSN-AUKUS will be a trilaterally developed vessel based on Britain’s next-generation design.
• It would be built in Britain and Australia and include cutting edge U.S. technologies.
  • Britain would take delivery of its first SSN-AUKUS submarine in the late 2030s, and Australia would receive its first in the early 2040s.
• Significance of this deal
  • For US
    • US has only shared nuclear submarine technology once before in 1958 with Great Britain.
  • For Indo-Pacific Region
    • Under this partnership, technology, scientists, industries and defence forces of these three countries will work together to deliver a safer and more secure region.
    • Some analysts feel that this partnership will lead to intensified arms race in the region.
  • For Australia
    • Australia has never had nuclear-powered submarines.
    • Hence, this step will give Australia naval heft in the Pacific, where China has been particularly aggressive.
    • Critics, on the other hand, claim that this deal would antagonise Beijing which will not be good for Australia.
    • Australia is now set to join an elite group of only six countries – India, US, UK, France, Russia and China – that operate nuclear-powered submarines.
    • It will also be the only country to have such submarines without having a civilian nuclear power industry.
  • For India
    • The new pact will add to the global efforts to balance China in the region.
    • It should be noted that Australia and India are close strategic partners in the Indo-Pacific region.
    • Australia is also a member of QUAD group. A stronger Australia would lead to further strengthening of QUAD.
  • For France
    • France is not happy with the deal and has termed this deal a “stab in the back”.
    • Australia had signed a contract to buy 12 Attack-class submarines from France in 2016. The first submarine was expected to be operational around 2034.
    • As a result of the current deal, Australia ditched the contract.
• How China views this agreement?
  • China denounced a new Indo-Pacific security alliance saying such partnerships should not target third countries.
  • It claims that the current cooperation would gravely undermine regional peace and stability, aggravate arms race and hurt the international non-proliferation efforts.
  • China claimed that western powers are using nuclear exports for geopolitical gaming tools.
  • Under this deal, highly-sensitive nuclear powered submarine technology will be exported to Australia.

Q.1. What is QUAD group?

The QUAD group, or Quadrilateral Security Dialogue, is a strategic forum comprising the United States, Japan, India, and Australia. It focuses on enhancing regional security, economic cooperation, and democratic values in the Indo-Pacific region. The group aims to address common challenges and promote a free, open, and inclusive Indo-Pacific.

Q.2. What is a submarine?

A submarine is a watercraft designed to operate underwater. It is equipped with propulsion systems, navigation tools, and weapons for various missions, including defense, research, and reconnaissance. Submarines can submerge to avoid detection and surface to perform tasks, making them versatile in naval operations.

Source: Australia, U.S., U.K. sign nuclear transfer deal for AUKUS submarines | India Today | Times of India

What’s in today’s article?

• Why in News?
• History of the Jews in India
• The Jews of Kerala
• Why is Jewish Community Dwindling in India/ Kerala?

Why in News?

• India's Jewish community is projected to comprise 4,000–5,000 people now, down from 20,000–50,000 in the mid-1940s.

History of the Jews in India:

• Origin:
  • It is thought that the first Indian Jews were originated from Israel, having settled on the Malabar coast after the Assyrian conquest of the Kingdom of Israel in the 9th century B.C.E.
  • This includes the Bene Israel, the Cochin Jews, and the Bnei Menashe.
• Under British imperial rule: Indian Jews prospered enormously, achieving heights in population and wealth. The Jewish population in British India peaked at around 20,000 - 50,000 in the mid-1940s.
• Jewing emigration from India:
  • The rise of Indian nationalism that accompanied sovereignty made some Jews uncomfortable, as they identified more as British than Indian.
  • This, coupled with the creation of the State of Israel in 1948, saw many Jews leave India.
  • Despite such heavy Jewish emigration, Jews continued to play an active role in Indian life throughout the latter half of the 20th century.
• Jewish community in India today:
  • India is home to 3 historically distinct Jewish communities: the Bene Israel ("Sons of Israel"), the Cochin Jews, and the Baghdadi Jews, and is projected to comprise 4,000–5,000 people now.
  • Among these, almost all belong to the Marathi-speaking Bene Israel community, settled on the Konkan coast for hundreds of years.
  • However, the honour of being the oldest Jewish of India goes to one of Kerala’s two main Jewish communities (Malabar/ Cochin Jews).

The Jews of Kerala:

• Malabar/ Cochin Jews:
  • The oldest documentary evidence of this community (copper plates of the Cranganore’s Hindu ruler from circa 1,000 CE) lists various economic and ceremonial privileges that the Jews enjoyed in the region.
  • Following the arrival of the Portuguese in the 16th century, Malabar Jews moved further south from Cranganore to Cochin (now Kochi) where the local king welcomed them.
• Paradesi/ foreign Jews:
  • They migrated to the Indian subcontinent in the 15th and 16th centuries from the Iberian Peninsula due to persecution by the Catholic rulers of Spain and Portugal.
  • They settled on the Malabar coast alongside pre-settled Jewish communities, as well as in Madras (now Chennai).
  • The Paradesi Jews of Cochin were active in Kerala’s spice trade, and those settled in Madras were involved in the trade of Golconda diamonds and other precious stones.
• Cultural evolution of Jews of Kerala:
  • The Paradesi Jews adopted Malayalam and many local customs and traditions.
  • However, they stopped marrying those from Kerala’s older Jewish community, and began to look down on them.
  • This effectively created two distinct Jewish communities in Kerala (Paradesis/ white Jews and the Malabaris/ black Jews). Although this characterisation is largely inaccurate.
  • In Cochin, the Koders were among the most prominent Paradesi Jewish families.

Why is Jewish Community Dwindling in India/ Kerala?

• Unlike Jewish communities in Europe or West Asia, the ones in India seldom faced anti-Semitism or persecution.
• However, there has been a steady migration of Kerala Jews to Israel since the 1950s. Only 14 Malabar Jews, and one Paradesi Jew are now left in Kerala.
• The majority of Jews who emigrated from India made this decision based on the influence of Zionism and a love for Israel, rather than a disdain for India.

Q.1. What do you mean by anti-Semitism?

Antisemitism is hostility to, prejudice towards, or discrimination against Jews. This sentiment is a form of racism, and a person who harbours it is called an antisemite.

Q.2. What is Zionism?

Zionism is an ethno-cultural nationalist movement that emerged in Europe in the late 19th century and aimed for the establishment of a Jewish state through the colonisation of a land outside of Europe.

Source: Once thriving, now all but gone: a history of Kerala’s Jewish communities | WJC

What’s in today’s article?

• Why in News?
• What is Hindenburg?
• What is Short selling?
• Background
• Hindenburg’s new allegation
• Stand taken by the SEBI on this controversy

Why in News?

A year and a half after its January 2023 report on the Adani Group, US-based short seller Hindenburg Research has levelled allegations against the chairperson of India’s capital markets regulator Securities and Exchange Board of India (Sebi).

Hindenburg Research has accused Sebi chairperson Madhabi Puri Buch and her husband of having stakes in offshore funds involved in the alleged Adani money siphoning scandal.

The short seller (Hindenburg Research) seeks to draw a connection between the alleged involvement of two offshore funds, the Buchs' investments, and their various professional associations, suggesting that Ms. Buch may have shown favoritism toward the Adani Group.

What is Hindenburg?

• Hindenburg Research is a U.S.-based financial research firm known for short selling, where it profits from a decline in a company's stock price.
• Founded by Nathan Anderson, the firm specializes in forensic financial research, often uncovering fraud or mismanagement.
• Hindenburg gained significant attention with reports on companies like Nikola and the Adani Group, leading to substantial market impacts.

What is Short selling?

• About
  • Short selling involves profiting from a decline in a stock's price by selling borrowed shares and repurchasing them at a lower price.
  • Short selling can serve many purposes, such as mitigating demand-supply imbalances in scrips and ensuring price efficiency.
  • However, it has also been used as a means of manipulation — or what the U.S Securities and Exchange Commission (SEC) has described as a bear raid.
  • In this context, it raises concerns about intent and credibility.
• Example
  • Anticipating a downward movement, an individual sells 10 shares at ₹100 apiece. The total sale value is ₹1,000.
  • The price of the share decreases to ₹85 apiece and they opt to buy the quantity back. This time it will cost them ₹850 — a direct profit of ₹150.
• Hindenburg and short selling
  • Hindenburg had shorted electric truck maker Nikola Corp in 2020 placing concerns about their functionality.
  • In October 2022, the Nikola’s founder Trevor Milton was convicted by a U.S. jury of fraud for lying to investors about the technology.

Background

• Hindenburg report on Adani
  • In a January 25, 2023 report, Hindenburg accused the Adani Group of decades-long stock manipulation and accounting fraud.
  • The report was released just before Adani Enterprises' Rs 20,000-crore follow-on public offer (FPO), leading to a sharp decline in Adani shares and the eventual cancellation of the fully subscribed FPO.
  • Adani denied the allegations, and most of the group's shares have since recovered.
• Expert committee formed by SC to investigate
  • In March 2023, the Supreme Court formed a six-member expert committee to investigate potential regulatory failures concerning the Adani Group.
  • Separately, the court asked Sebi to specifically investigate if there was:
  • a violation of the minimum public shareholding norms in public limited companies,
  • a failure to disclose transactions with related parties, or
  • any manipulation of stock prices.
• Observation made by SC
  • In May 2023, the expert committee reported that Sebi had found no evidence of money flow violations from offshore entities into Adani companies.
  • By November 2023, the court upheld Sebi's investigation, rejecting the need for a Special Investigation Team (SIT) or CBI involvement.
  • SEBI had completed 21 out of 22 probes by March 2024, with the final investigation nearing completion.

Hindenburg’s new allegation

• Hindenburg Research's allegations against SEBI Chairperson Madhabi Puri Buch and her husband revolve around their supposed hidden stakes in offshore funds in Bermuda and Mauritius, which are linked to the Adani Group's alleged stock manipulation.
• Hindenburg suggests a conflict of interest and possible collusion due to the Buchs' investments in these funds.
  • It asserted that this might explain SEBI's reluctance to take meaningful action in the ongoing Adani investigation.
• The allegations also focus on Ms. Buch's professional engagements.
• Hindenburg claims that she retained ownership of her consulting firm, Agora Partners Singapore, during her tenure at SEBI, only transferring it to her husband's name after becoming SEBI Chairperson.
• Furthermore, Hindenburg accuses her husband, Dhaval Buch, of benefiting from his role as a senior advisor at Blackstone, alleging that SEBI's policy changes under Ms. Buch's leadership favored Blackstone's interests in India's real estate investment trusts (REITs).

Stand taken by the SEBI on this controversy

• Sebi defended Madhabi Puri Buch, stating that she has consistently made necessary disclosures regarding her securities holdings and transfers.
• Sebi also noted that Buch has recused herself from cases involving potential conflicts of interest.
• During the Hindenburg probe, Sebi has communicated with over 100 regulators and agencies and examined more than 300 documents.

They advised investors to stay calm and exercise due diligence.

Q.1. What is follow-on public offer (FPO)?

A Follow-On Public Offer (FPO) is a process where a company issues additional shares to the public after its initial public offering (IPO). It allows the company to raise more capital, typically for expansion or debt repayment, and provides existing shareholders an opportunity to buy more shares.

Q.2. What is conflict of interest?

A conflict of interest occurs when an individual's personal interests or relationships interfere with their professional duties or responsibilities. This can lead to biased decision-making or actions that favor personal gain over impartiality, undermining trust and fairness in professional or organizational settings.

Source: All you need to know about the Hindenburg-Adani-Buch saga | The Hindu