AFP

South Africa, a country plagued by power shortages, on Tuesday imposed the the toughest electricity rationing in two and a half years after labour disputes disrupted production at several plants.

Power rationing to consumers was ramped up to so-called Stage 6 load-shedding to prevent countrywide blackouts.

Stage 6 means that South Africans will now experience multiple cuts per day, each lasting several hours.

Africa’s leading industrialised country last experienced such drastic outages in December 2019. 

“There is a high risk that the stage of load-shedding may have to change at any time, depending on the state of the plant,” power utility Eskom said in a statement.  

Power cuts are a major source of frustration and discontent in South Africa, where protests broke out near Eskom’s offices last year.

US authorities fined Ernst & Young a record $100 million over cheating on accounting ethics exams that the firm initially covered up from regulators, officials announced Tuesday.

From 2017 to 2021, 49 audit professionals with the “Big Four” firm sent or received answer keys to Certified Public Accountant (CPA) ethics exams, according to a Securities and Exchange Commission order.

Hundreds of other Ernst & Young professionals cheated on other exams, while a “significant” number of staff did not cheat themselves but failed to report the misconduct, said the SEC order, part of the agency’s settlement agreement with the firm.

“It’s simply outrageous that the very professionals responsible for catching cheating by clients cheated on ethics exams of all things,” said Gurbir Grewal, head of the SEC’s division of enforcement. 

The order also took Ernst & Young to task over its lack of candor with the agency.

On June 19, two days after the SEC fined KPMG $50 million over similar ethical misconduct, the agency sent Ernst & Young a formal request asking if the firm had received any ethics or whistleblowing complaints.

Ernst & Young’s response to the SEC implied that the firm did not have any current issues, even though it had received a report on June 19 from an employee describing how a colleague had emailed the answers to the CPA ethics exam.

The firm undertook an internal probe of the incident that was broadened in October 2019. Ernst & Young did not disclose the problem until March 2020, the order said.

“The SEC will not permit the submission of misleading information or any action that delays or frustrates our mandate to protect investors and our markets,” said Melissa Hodgman, associate director of the SEC’s enforcement division. 

Besides the fine, Ernst & Young must retain two independent consultants to review its ethics policies and its disclosure failures.

“We have repeatedly and consistently taken steps to reinforce our culture of compliance, ethics, and integrity in the past,” said an Ernst & Young media statement. 

“We will continue to take extensive actions, including disciplinary steps, training, monitoring, and communications that will further strengthen our commitment in the future.”

G7 leaders on Tuesday condemned China’s “non-transparent and market-distorting” international trade practices in an end-of-summit statement billed as “unprecedented” by the United States.

The statement, which also pledged to reduce “strategic dependencies” on China, came hours before the leaders join a larger group of their counterparts at a NATO summit in Madrid.

There, the 30-member alliance was also poised to toughen its stance against Beijing in an update of its “strategic concept”.

The United States has long cast a wary eye at China over its trade practices, which Washington believes are designed to accord an unfair advantage to Chinese companies over foreign firms.

Russia’s invasion of Ukraine and Beijing’s refusal to distance itself from Vladimir Putin has prompted other countries, including export giant Germany, to also reconsider their economic reliance on the Asian giant.

Beijing’s increasingly strident claims over much of the South China Sea has also sparked alarm over its military ambitions.

In their closing statement following a three-day summit in the Bavarian Alps, the G7 leaders signalled that they would seek to extricate themselves from economic dependence on China. 

They vowed to “foster diversification and resilience to economic coercion, and to reduce strategic dependencies”.

A US official called the collective statement “unprecedented in the context of the G7” in acknowledging “the harms caused by China’s non-transparent, market distorting, industrial directives”. 

The leaders also voiced concern about human rights violations in China, urging Beijing to respect fundamental freedoms. 

They stressed that the situation in Tibet, and in Xinjiang, where there is “forced labour”, “is of major concern to us”.

The statement also urged China to “honour its commitments” under the Sino-British Joint Declaration, in which Beijing agreed Hong Kong could keep some freedoms and autonomy for 50 years under a “One Country, Two Systems” model.

It pressed Beijing to get Russia to withdraw from Ukraine.

– ‘Serious danger’ –

German Chancellor and summit host Olaf Scholz underlined the “ambivalence” in the West’s relationship with China.

But he said in an interview with Welt daily it was now “very clear that we need to diversify our supply chains and exports”.

That means also “having an eye on the entire Asian zone, because many countries have risen, not just China”.

After several years of detente and cooperation as China caught up economically with the West, Beijing has since taken a more assertive tone on the world stage.

Western allies acknowledge that the world’s biggest challenges, including climate change, cannot be solved without Beijing’s cooperation, but have become more cautious about China’s actions and aims.

The export powerhouse has over recent years offered billions in investments and loans to build roads, rail and bridges in poorer countries around the world.

While greeted enthusiastically in the beginning, some receiving countries have later found themselves mired in debt.

Scholz recently warned that China’s years-long lending spree in poorer countries, particularly in Africa, poses a “serious danger” that could plunge the world into the next financial crisis.

Critics have also accused Beijing of seeking to buy influence in the south.

To offer an alternative to the world’s poorest, the G7 on Sunday pledged $600 billion for global infrastructure programmes.

European Commission President Ursula von der Leyen said the huge programme showed partners in the developing world “that they have a choice”. 

Beyond economic aid, Western allies are also poised for the first time to pivot their military strategy to address the challenges posed by China as they gather in Madrid for a NATO summit. 

The update of the “strategic concept” is the alliance’s first in a decade.

Red Bull announced on Tuesday its first foray into the exclusive world of the hypercar with a limited production run of 50 starting in 2025.

The RB17 road car will carry a price tag of £5 million (5.79 million euros), before tax, a statement reported, with the project overseen by Andrew Newey, the Chief Technical Officer who designed Red Bull’s four Formula One world championship winning cars.

Production on the two-seater hybrid V8 engine producing over 1100bhp will be at Red Bull’s Milton Keynes site.

Red Bull team principal Christian Horner said the RB17 “marks an important milestone in the evolution” of their Advanced Technologies arm which for the first time is producing a car with the energy drinks giant’s logo on the bonnet.

Newey said the RB17 “distills everything we know about creating championship-winning Formula 1 cars into a package that delivers extreme levels of performance in a two-seat track car”.

He added: “Driven by our passion for performance at every level, the RB17 pushes design and technical boundaries far beyond what has been previously available to enthusiasts and collectors.”

Red Bull are joining a club which was valued at USD 13.7 billion in 2019 and which counts among its members pitlane rivals Ferrari, McLaren, and Aston Martin, whose Valkyrie supercar was designed by Newey.

Hypercars are a rare breed, with only around a dozen marques, their natural habitat the wealthier corners of the earth with Europe’s place as the leading sales region due to be challenged by Asia Pacific according to industry forecasts.

The US economy will slow this year as intended and is expected to avoid a downturn, but the Federal Reserve will have to raise borrowing rates quickly, a top central bank official said Tuesday.

“Recession is not my base case right now. I think the economy is strong,” New York Fed President John Williams said on CNBC.

But he said policymakers need to hike rates “expeditiously” to tamp down inflationary pressures and get the key policy interest rate to 3.0-3.5 percent by later this year.

With American families struggling in the face of soaring gas and food prices, the Fed has shifted into high gear, implementing the biggest rate hike in nearly 30 years earlier this month to try to cool the economy and rein in inflation.

The Fed since March has raised the benchmark borrowing rate 1.5 percentage points, from zero where it had been since the start of the Covid-19 pandemic, and is expected to announce another three-quarter-point increase at its July policy meeting, with further hikes coming.

That has raised fears the campaign to quell the highest inflation in four decades will tumble the world’s largest economy into recession.

But Williams echoed the cautiously optimistic view of Fed chief Jerome Powell, saying there is a path forward that avoids a contraction.

“I’m expecting growth to slow this year quite a bit relative to what we had last year,” with GDP expanding by 1.0 to 1.5 percent, he said.

“It’s not a recession, it’s a slowdown that we need to see in the economy to reduce the inflationary pressures and bring inflation down.”

The Russian invasion of Ukraine has been a major factor contributing to rising food and oil prices worldwide, and Williams noted that the main risks to the US economy “are coming from abroad.”

He said it was “perfectly reasonable” to expect the Fed to raise the policy rate to 3.5-4.0 percent next year, but that the final path will depend on the economic data.

“We need to raise interest rates quite a bit this year and into next year,” he said. “We’ve got to get interest rates higher and we have to do that expeditiously.”