Vulture Watch

16/01/2023

Africa is faced with more grim economic forecasts as the World Bank cuts down Kenya's 2023 growth projection

What was an economically tumultuous year for Kenya in 2022, promises to be even more challenging in 2023 due to a reduction in the projected growth for its economy in 2023 at 5.0% compared to last year.

However, Kenya is hardly the only country in Africa facing such a bleak economic forecast.

Practically every sub-Saharan African country has been projected to perform worse than it did last year economically, including Africa’s richest country, Nigeria, who’s economy the Bank projected would slow to 2.9%

Ironically, this is the type of situation vulture funds hope for as they are lured by the possibility of purchasing distressed debt at deep discounts.

The consequences of distressed African markets could therefore extend beyond the immediate economic impacts.

Read more at:

The World Bank’s global economic forecast has foreshadowed what can only be described as a recession for 2023, and some countries have been projected to bear the brunt more than others

03/01/2023

2023 is set up to be an exciting one in international arbitration

The Nigeria v. P&ID case will be one worth following when the trial starts at the London High Court this January.

This long-running case involving an ‘allegedly fraudulent’ $10 billion arbitral award against Nigeria, which has now been going on for a decade, originates back to a gas contract signed between P&ID and Nigeria’s Ministry of Petroleum Resources in 2010.

In recent years, Nigeria has established a ‘strong prima facie case’ to argue that the deal with P&ID ‘was obtained through fraud and corruption’.

According to multinational law firm Arnold & Porter ‘If the upcoming trial goes Nigeria's way, it will “no doubt” serve as encouragement for other countries hit with adverse arbitral awards to thoroughly investigate allegations of fraud and corruption’.

Read more at:

The new year is gearing up to be an exciting one in international arbitration, as courts get ready to decide how far the U.S. Supreme Court narrowed a foreign discovery statute and whether a $10 billion arbitral award against Nigeria was procured through fraud, and arbitral institutions prepare for....

03/01/2023

The Dean of the University of Cape Coast Business School, Professor John Gatsi, has warned that the external debt situation in Ghana puts the nation at risk of attracting vulture funds.

The Ghanaian economy is incredibly vulnerable - prime for insidious vulture capitalists to take advantage.

Read more at:https://www.myjoyonline.com/external-debt-situation-exposes-ghana-to-vulture-capitalists-economist/

03/01/2023

The saga continues...

New court documents have revealed that P&ID shareholders are currently undertaking their own arbitration dispute against the British Virgin Islands' shell company.

According to the documents, the arbitration between the P&ID shareholders was initiated by a subsidiary of VR Capital Group in 2020.

The Nigerian government is currently fighting to overturn an $11 billion arbitral award - worth a third of Nigeria's foreign reserves - secured by P&ID over a fraudulent gas contract dating back to 2010.

As the start of the much-anticipated trial between P&ID and the Nigerian government approaches, these new findings add an additional layer of distrust to the P&ID story and brings fresh credibility to Nigeria's claims.

It seems like there is indeed light at the end of this dark tunnel; Nigeria's outcome looks promising.
https://www.bloomberg.com/news/articles/2022-12-14/owners-of-11-billion-arbitration-award-against-nigeria-fall-out

03/01/2023

Does Kenya run the risk of facing vulture funds?
At present Kenya's debt-to-GDP ratio is above 60%, a figure that is deepening investor angst over the country's ability to pay its debts.
As Kenya's sovereign debt continues to increase, more vultures are seen circling around
Troubled economies like Kenya’s lure predatory funds who are attracted by the prospect of purchasing distressed debt at deep discounts.
Other African countries targeted through this scheme include Tanzania, Uganda, Mozambique, Ethiopia, DRC, Congo, and Angola, to name a few.
https://www.businessdailyafrica.com/bd/opinion-analysis/columnists/why-kenya-faces-the-risk-of-vulture-funds-taking-over-debts--4039836?view=hymn

03/01/2023

A Strong Dollar Fuels Unrest in sub-Saharan Africa
The US Federal Reserve’s monetary policy tightening and a strong dollar are having a knock-on effect on African nations’ balance sheets and public debt burdens, fueling civil unrest across the region.
Government debt in sub-Saharan Africa has risen to its highest level in more than a decade with debt levels now at 77% of gross domestic product on average across six key African economies: Nigeria, Ghana, Ethiopia, Kenya, Zambia, and Mozambique.
As living standards deteriorate, civil unrest and government stability risks have only worsened.
Unfortunately, volatility and distress continue to afflict the sub-Saharan region and its people.

The Fed's policy tightening and a strengthening dollar are having a knock-on effect on African nations' balance sheets and public debt burdens.

16/11/2022

Every climate crisis is an economic crisis.
80% of carbon emissions come from G20 nations, but it is the poor countries that experience the consequences first.
Ahead of the COP27, nations must realise that urgent measures are needed to tackle both the global debt and climate crises. This includes restructuring forms of climate financing and revisiting the sovereign debt owed by distressed countries such as Pakistan and Sri Lanka.
The problem, however, extends beyond Asian territory.
At present, 81% of public climate finance given to Latin America and the Caribbean is delivered through loans, adding to their foreign debt burdens as well as hindering their process towards economic growth and recovery.
Improving the climate and financial stability of developing countries will eventually reduce the volatility affecting their markets and consequently prevent vulture funds from profiting from their misfortunes.
Now is the time to act.

Sub-Saharan African countries will have to take on almost $1 trillion in debt over the next ten years unless wealthy countries provide adequate finance to address the climate crisis, according to a new report published today by Debt Justice and Climate Action Network International [1]. This will amo...

16/11/2022

Vulture funds have a history of feeding off Nigeria
In 2018 construction company IPCO (Nigeria) Ltd managed to reach a settlement with the Nigerian National Petroleum Corp (NNPC), a state-owned oil company, before their trial was due to start and “fraudulently obtained” an arbitration award of approximately USD$150 million. IPCO had taken the NNPC to arbitration over a 1994 construction contract.
As the start of the much-anticipated trial between P&ID and the Nigerian government approaches, new evidence has revealed that individuals from the company helped finance IPCO’s dispute against the NNPC.
The similarity between the cases reveals that a clear pattern exists linking associates of P&ID to other examples of allegedly corrupt arbitration activity in Nigeria.
Let us hope that justice will finally prevail this January. The truth shall speak for itself.

16/11/2022

Regulators are finally taking proactive steps towards unmasking deceitful “green” investors
The UK’s financial regulator, the Financial Conduct Authority (FCA) is clamping down on “greenwashing” with proposed restrictions on investment managers using terms such as “green” and “ESG” in their fund marketing campaigns.
Complaints are rising that unsuitable fossil fuel investments are widely included in funds that are branded as sustainable and regulators want to ensure that individual investors know what they are buying.
“Greenwashing misleads consumers and erodes trust in all ESG (environment, social and governance) products,” announced the FCA.
The FCA joins other financial regulators round the world in cracking down on greenwashing, whereby investment managers make “exaggerated, misleading or unsubstantiated environmental claims” for their products.

FCA rules will govern terms such as ESG in fund marketing and will affix consumer labels to sustainable investments

02/11/2022

Every climate crisis is an economic crisis.
80% of carbon emissions come from G20 nations, but it is the poor countries that experience the consequences first.
Ahead of the COP27, nations must realise that urgent measures are needed to tackle both the global debt and climate crises. This includes restructuring forms of climate financing and revisiting the sovereign debt owed by distressed countries such as Pakistan and Sri Lanka.
The problem, however, extends beyond Asian territory.
At present, 81% of public climate finance given to Latin America and the Caribbean is delivered through loans, adding to their foreign debt burdens as well as hindering their process towards economic growth and recovery.
Improving the climate and financial stability of developing countries will eventually reduce the volatility affecting their markets and consequently prevent vulture funds from profiting from their misfortunes.
Now is the time to act.

https://debtjustice.org.uk/press-release/the-climate-crisis-could-increase-african-country-debts-by-1-trillion

26/10/2022

Volatility is back and so are the vultures.

Hedge funds are currently circling foreign exchange markets, where a sudden rise in volatility offers to boost returns for the few ‘specialist’ investors who survived the decade-long period of calm that forced many from the sector.

The years of muted volatility culled existing currency hedge funds and deterred the creation of new ones, a process which typically takes 7-8 months.

Unable to resist the opportunities provided by the new inflationary environment old players in the industry are pulling themselves out of retirement to take profit.

Beware. The mavericks are hungry and out for prey.

Veteran hedge fund manager John Taylor describes one of his favourite Gary Larson cartoons, where one vulture sitting on an animal carcass says to another as more descend: "good friends flying in from all over...this is the best of times".

26/10/2022

How to react when the media urges us to feel compassion with greedy vulture fund managers?

This piece chronicles U.S. Senator Michael Bennet's attempts to "do the right thing".

It is unclear how this pursuit led him to invest in Puerto Rican government bonds during the country's brutal debt crisis.

While the Puerto Rican people continue to suffer as a result of this crisis, Bennet's original investment is now worth between $1 million and $5 million dollars.

As a U.S. Senator, where is the transparency?

For someone who keeps millions in entities connected to two notorious offshore tax havens, it is clear Bennet lacks a moral code.

https://news.yahoo.com/michael-bennet-stock-portfolio-shows-084949351.html