TheChek News Flow

MDMA-based mental health treatment faces wary US regulator

Food and Drug Administration poised to call for outside assessment in test for psychedelics sector

The first mental health treatment using schedule-1 drug MDMA faces a significant regulatory hurdle as the US Food and Drug Administration is poised to ask outside experts to scrutinise the treatment for post-traumatic stress disorder.

Lykos Therapeutics’ MDMA-assisted therapy for PTSD is set to be reviewed by an FDA advisory committee in the coming months, which would vote on whether the controversial treatment should be approved, according to two people familiar with the matter.

The decision to convene the panel, which could be announced as early as this week, shows the high degree of caution with which the FDA is approaching a new class of drugs that have historically come with harsh criminal penalties in combination with therapy to treat mental health disorders.

An interim review of the two clinical studies associated with Lykos’ PTSD treatment by the Institute for Clinical and Economic Review raised concerns about the design and conduct of the trials. The influential non-profit group said they raised “many uncertainties about the balance of benefits and harms” of the treatment.

By the conclusion of Lykos’ second late-stage study into PTSD treatment, during which patients take MDMA while receiving psychotherapy, 71 per cent of people in the MDMA group improved sufficiently to no longer meet the criteria for PTSD diagnosis, compared with 48 per cent in the placebo group.

But the ICER expressed concern about the challenges inherent with “double-blinding” patients in a study of a psychedelic drug, saying it was nearly impossible to ensure that neither patients nor investigators knew who was undergoing the treatment because of the medicine’s obvious hallucinatory effects.

People close to Lykos said they had been expecting an advisory committee to be called and were still hopeful that the decision to convene the panel would not delay the expected August 11 approval date for the treatment. The results of the panel’s votes are not binding but are typically followed by the agency.

The advisory panel is likely to opine on which specific patients should be able to access the treatment. The FDA was also handling the decision with caution as it rarely reviews treatments involving psychotherapy as well as drugs, the people said.

“Certainly, there’s a labelling issue there that the FDA will be interested in: who has PTSD that matches what the therapy is approved for,” said David Rind, ICER’s chief medical officer. “They need to really understand what the therapy is . . . to move forward with this as there were many therapy options in these trials, and I actually think that causes problems for how you disseminate this.”

The approval decision over Lykos has big implications for the nascent category of psychedelic-based treatments for mental health problems — as a number of other biotechs conduct late-stage trials into psychedelic-based mental health treatments.

The psychedelic drug sector has garnered billions of dollars of investment in recent years. Lykos was spun out from the Multidisciplinary Association for Psychedelic Studies, a non-profit group which has been a forthright advocate for psychedelic drugs since it was founded by Rick Doblin in 1986.

Earlier this year, Lykos raised $100mn in a funding round from 10 investors including the charitable foundation run by hedge fund billionaire Steven Cohen and his wife Alexandra.

If the drug is approved by the FDA, the Drug Enforcement Administration will be given 90 days to reclassify MDMA as a less harmful drug as the schedule-1 category restricts the use of drugs for medical purposes.

London-based Compass Pathways is expected to publish data later this year from a phase-three trial of 800 human subjects who have taken synthetic psilocybin for treatment-resistant depression, while Nasdaq-listed Cybin will also initiate its late-stage trial looking at a psilocybin analogue as a treatment for major depressive disorder.

Lykos did not immediately respond to multiple requests for comment. The FDA said the agency “cannot comment on possible or pending product applications or approvals”.

Spanish lender says the offer by its larger rival undervalues the company

Spain-based lender Banco Sabadell has rejected a €12bn takeover bid from its larger rival BBVA, saying the proposed deal “significantly undervalues” its standalone growth prospects.

Last week BBVA unveiled a surprise offer for Sabadell, saying the combination of the two Spanish lenders would create “one of Europe’s largest and most robust financial entities”.

The rejection means BBVA must now decide whether to take the riskier path of launching a hostile bid in a country not accustomed to such dealmaking.

It is BBVA’s second attempt to acquire Sabadell in less than four years. The latest bid had sent the would-be buyer’s share price lower before the board of the smaller bank formally rejected the all-stock offer on Monday.

Sabadell, which owns UK high street bank TSB, said its board “believes that the proposal significantly undervalues the potential of Banco Sabadell and its standalone growth prospects”.

It added: “The board is highly confident in Banco Sabadell’s growth strategy and its financial targets and is of the view that Banco Sabadell’s standalone strategy will create superior value for its shareholders.”

BBVA responded by saying: “We regret that the board of Banco Sabadell has rejected such an attractive offer.”

Bankers and regulators have long made the case for more consolidation among Spanish banks, saying it would boost the sector’s resilience.

BBVA last week said a takeover of Sabadell would create a combined entity with complementary customer bases and the size needed to cope with future interest rate cuts and the accelerating digitisation of finance.

But some analysts had cast doubt on the scale of potential financial benefits stemming from the proposed deal.

When BBVA launched its bid it had a market capitalisation of just under €60bn, but that has fallen to €57.5bn since then.

Sabadell said in its statement that “the recent material decline and volatility in the BBVA share price increases the uncertainty around the value of the proposal”.

When it announced its bid, BBVA said it was offering a 30 per cent premium for Sabadell based on closing share prices last Monday and a 50 per cent premium above weighted average prices in the past three months.

The two banks attempted to strike a deal in 2020 during the Covid-19 pandemic, but talks broke down following disagreements over pricing.

Sabadell is being advised by Goldman Sachs and Morgan Stanley. UBS and JPMorgan are advising BBVA on its bid, said people briefed on the matter.

In places as far apart as Oxford and Manchester, independents won seats on an anti-Israel platform.

It’s a reliable rule—and an occasional source of tepid comfort—that however bad things seem in America, there is always something much worse going on somewhere else.

This applies not only to places where real genocides are happening, as opposed to the ones American police officers are accused of committing, or where deprivations of liberty are more serious than being denied food delivery when you’ve illegally occupied a university building. It obtains also in countries that some of us like to believe have achieved a high level of democratic civilization.

So as you watch while students, faculty and staff repurpose centers of American learning into Hamas propaganda factories, spare a thought for what just happened in the home of our most reliable ally, Britain.

You might have seen some of the recent manifestations of the reach of Islamist extremism on the streets of London—an antisemitic slogan projected onto Parliament, Jew-hatred paraded in protests across the capital, a police officer warning a man in the vicinity of an anti-Israel protest that by being “openly Jewish,” he posed a threat to public safety.

But when voters across England voted last Thursday in the last round of local elections before a national poll that must be held by January at the latest, the political force of such sentiment was on display.

You can’t take local elections in Britain too seriously. Most Brits don’t. England is a unitary political entity, unlike the U.S., with most major policies decided at the national level. The functions devolved to town and even city councils and mayors are as drearily mundane as their names are colorful. In places like Lower Slaughter and Grimsby, the biggest matters for locally elected officials are trash collection, the local parks and broken sidewalks.

But they play some role in important things like law enforcement. And local politics are highly partisan, the elections seen as tests for national political trends.

Last week’s results showed the opposition Labour Party is likely to take national office from the clown-car government led by revolving Conservative prime ministers for the past four years.

But its victory was tempered across much of the country by the largest ever vote for “independent” Muslim candidates, furious with Labour for its supposedly insufficient condemnation of Israel’s war in Gaza.

Until four years ago Labour was led by a man who had openly courted Hamas and smiled at the rise of antisemitism in its ranks. Under its new leader, Keir Starmer, the party has tried to clean up its act—among other things by striking an even-handed approach to the war in Gaza, condemning the Oct. 7 attacks and calling gingerly for a cease-fire. This has outraged many of its radical supporters, who struck back last Thursday.

In the northwest town of Oldham, gains by pro-Gaza candidates cost Labour control of the local government. In nearby Blackburn, Labour lost council seats to independent candidates. Across the Pennines in Bradford, candidates on the same platform won four seats, placing the independent caucus on the same level as the Tories as the largest opposition group. In Birmingham, a pro-Gaza independent received 20% of the vote for mayor.

Many of the radicals ran as Green Party candidates, though their campaigns focused less on low-emission zones than the Gaza war zone. In areas where Muslims made up more than 20% of the population, Labour lost almost 18 points from the previous elections three years ago.

In places as far apart as Oxford and Manchester, independents who ran on an anti-Israel platform won seats, setting up some potentially troublesome issues of local administration. It’s one thing to have your trash collection organized by a Hamas supporter, quite another to have him making decisions about your local police.

Perhaps most colorful in every sense was Mothin Ali, a successful Green candidate in Leeds who concluded a fiery victory speech about Gaza with that famous rallying cry of the defenders of the environment: “Allahu Akbar!”

One could overstate the problem. Turnout was low, and except in a few districts radicals won only a small vote share. But the larger significance of this electoral breakthrough shouldn’t be underestimated.

Barring a Tory resurrection of Lazarus proportions, Labour will form the national government in less than a year, with a comfortable majority, and it will be under intense pressure from this rapidly rising breed of “anti-Zionists”—not all of them Muslim, at home and abroad.

Earlier this year Mr. Starmer had to pull the party’s support at the last minute from a candidate in a parliamentary by-election who had been caught on film spouting anti-Jewish conspiracy theories. The seat was won by an independent openly supportive of radical Islam.

The Labour leader is now beset with calls to end his already highly qualified support of Israel. During the weekend, John McTernan, a Labour adviser who once worked for Prime Minister Tony Blair, tweeted: “We are being sent a message about Gaza and must listen, understand and act.”

At least in America they’ve only taken over the universities.

When Goldman Sachs CEO David Solomon gathered two dozen tech executives, bankers and investors to a wine and steak dinner in Las Vegas last November, seated next to him was Cliff Obrecht, co-founder of Canva, a $26 billion privately held design software company.

Canva is exactly the kind of company Goldman would look to take public one day—profitable and growing fast. But Solomon’s investment banking giant wasn’t waiting for an initial public offering to do business with the firm. Goldman Sachs’ asset management arm was the largest investor in Canva’s $1.5 billion secondary share sale, which was completed last month, investors briefed on the deal said. Meanwhile, Goldman’s investment bankers advised Canva on what was one of the largest private company tender offers in history, which allowed both early investors and employees to sell.

The financial behemoth’s involvement underlined the growing importance of share tenders that let employees and early investors sell their stock to new investors. It’s the kind of deal that once made small ripples for private tech investors but has turned into a tidal wave. And it has big implications for Wall Street. By offering early investors a route to sell their stock, these deals are an important advance for private tech companies who don’t feel a need to quickly go public—or who don’t want to road-test a bumpy market.

At least one other significant deal is likely coming soon, also with Goldman’s involvement. Ten-year-old Figma, which makes design and prototyping software and that saw a deal to sell itself to Adobe for $20 billion fall apart last year, is trying to line up investors to buy hundreds of millions of dollars’ worth of employee and early investor shares at a price that would value the company at about $12 billion, people close to the company said. A Figma spokesperson declined to comment.

“Right now, we’re seeing more companies than ever exploring doing pure, large secondaries, and I do think it’s in part a function of the markets we’ve been in,” said Ryan Nolan, co–global head of software investment banking at Goldman Sachs, who advised Canva.

Investment banks helped arrange several—but not all of—such deals pulled off by a who’s who of large private tech firms in the past few months, including artificial intelligence firms Databricks and OpenAI, payments darling Stripe, data center startup CoreWeave and software startup Rippling. SpaceX, Elon Musk’s privately held rocket company, built its own software to organize regular share sales by employees.

Canva’s tender brought in a crop of big new investors, including mutual fund Fidelity Management, Singaporean sovereign wealth fund GIC and mega family office Iconiq, as well as Goldman; this investor roster hasn’t been previously reported. Figma is also discussing secondary investment with large mutual funds, people familiar with the matter said.

Such tender offers are one reason investment bankers have fretted that there will be a relatively light volume of tech IPOs this year. That could create an awkward dynamic for the investment banks, which often compete to lead IPOs and can generate tens of millions of dollars in fees from such listings, based on a low single-digit percentage of the capital that companies raise.

Secondary deals yield similar fee charges but are “heavily negotiated,” said Tom Callahan, CEO of Nasdaq Private Market, which runs secondary transactions. Usually only one or two banks work on those deals, however, making them potentially more lucrative than IPOs if companies raise enough cash.

Colin Stewart, global head of technology equity capital markets at Morgan Stanley, which advised CoreWeave on a $642 million secondary sale that was completed in December, said the investment bank views secondary transactions as part of the “life cycle of fees you can earn.”

He continued: “This adds another product to the life cycle. It may elongate the life cycle. But it adds another product.”

‘Tricky Transactions’

Tender offers are nothing new. Marquee tech startups such as Facebook, Uber and Airbnb arranged large employee shares before they went public. When those companies did so, they raised a larger slug of cash for their business. That isn’t the case for Figma, Canva, SpaceX and Stripe.

Those companies don’t need to raise cash, as they have plenty, but they face both employees and existing investors who want to realize gains on some of their valuable stakes. Meanwhile, prospective late-stage tech investors have plenty of money to invest in a shrinking number of companies that are still growing quickly.

“You have these large private companies not pushing toward the public market. They’re large in terms of revenue and in terms of employees. Those employees haven’t had liquidity in the last couple years,” Stewart said.

The best of those companies can still attract significant investment in the private markets, he said. “The capital isn’t infinite, but it’s far larger than you’ve seen over the last couple of decades,” Stewart added.

Such secondary deals are also getting larger because they aren’t just employee share sales; early investors are also looking to return capital to their limited partners. Rippling, for instance, plans to allow two-thirds of the $590 million it raised last month for seed investors to cash out some of their stakes, with the rest going toward employees, a person familiar with the matter said.

The pickup in deals is also notable in part because secondary sales can be slow moving and difficult to pull off. Companies can’t legally survey employees or investors ahead of securing capital on how much stock they want to sell. Once companies get capital commitments and determine the share sale price, employees and investors have a few weeks to decide how much they want to sell. “These are tricky transactions,” Nolan said.

Both Sides of the Deal

Goldman also could play both sides of the deal. Its asset management group and its private wealth clients invested hundreds of millions of dollars in both Stripe and Canva through Goldman’s growth equity fund and by offering shares in the company to wealthy clients. (Decisions about how much of the share sale to allocate to each investor are “determined by the company” rather than its bankers, Nolan said.)

Darren Cohen, co-head of Goldman’s growth equity team, said the firm avoided investing in late-stage software firms in 2020 and 2021 due to high valuations. But with companies like Canva and Stripe recently raising money at significantly below those peaks, the firm saw it could invest at attractive valuations “calibrated to public names.”

In both Canva and Stripe, Goldman’s investing arm already appears to have made a couple of good bets.

Stripe sold shares to Goldman and other investors at a $50 billion valuation last March, in a fundraising effort that took place when venture capitalists were most afraid to invest and most skeptical of Stripe. After the company’s financial picture improved, investors recently bought more at a $65 billion valuation in another secondary share sale, marking up Goldman’s stake. Canva, recently valued at about $26 billion, set the price of its deal late last year, before public stock prices started to accelerate. Canva’s fundraising round would end up oversubscribed many times over. Both deals included rosters of investors that also typically invest in IPOs.

Cohen said he doesn’t ask executives at these companies when exactly they plan to go public. “We have a long duration. We can be patient investors,” he said.

Last week, the Biden administration released its final rules attempting to cut China out of the U.S. battery supply chain and encourage American companies to build battery and electric vehicle manufacturing capacity in the U.S. It left one conspicuous opening for Chinese companies: For two years, they could continue to supply graphite to U.S. battery manufacturers and automakers, who claimed that without the exemption, none of their EVs would qualify for Inflation Reduction Act tax credits. China makes virtually all the world’s battery-grade graphite, and the automakers said the reprieve would give them time to find other sources of the material.

The leniency arguably should have included another component—lithium-iron-phosphate, or LFP, an iron-based cathode used in most Teslas and Chinese EVs. Today, Chinese companies such as Contemporary Amperex Technology Ltd. make almost all of the world’s LFP batteries. In contrast, the major non-Chinese automakers, apart from Tesla, have favored nickel-manganese-cobalt batteries, which deliver higher energy density and greater driving range than LFP, but also typically cost more and face more supply constraints because their metals are scarcer. Ford, General Motors, Volkswagen and other automakers plan to incorporate LFP into at least some of their models, and that number is likely to grow because of the pressure to cut costs.

But the U.S. industry has been slow to create a local supply of LFP: Last year, Ford announced that it would license LFP technology from CATL, installing it in a new plant in Marshall, Mich. GM and Tesla are also reportedly negotiating LFP licensing deals with CATL. U.S., Japanese and South Korean companies are building 34 battery gigafactories in the U.S., according to The Information’s Gigafactory Database, but the Ford plant and an Illinois factory planned by China’s Gotion are the only two that will make LFP. The rest will produce NMC cells and packs.

For the past four years, when I have asked auto executives why they are building almost exclusively NMC plants, they have uniformly said NMC batteries are the best available, but that they are prepared to switch if something better comes along. Analysts say NMC in fact did seem like the best battery until the late 2010s, when sudden improvements in LFP by Chinese companies made those batteries competitive. But by then, the automakers and their South Korean suppliers had already committed to NMC.

The Invention of LFP

LFP was invented in the early 1990s in the lab of John Goodenough, the late University of Texas physicist who shared a 2019 Nobel Prize for creating the lithium-ion battery. The breakthrough offered many potential uses, but suffered from a considerable shortcoming—it barely conducted electricity. Soon after, Michel Armand and Karim Zaghib, researchers for utility Hydro-Québec, resolved the flaw with a carbon coating that vastly increased LFP’s conductivity. In the early 2010s, U.S. battery startup A123 Systems briefly commercialized LFP in power tools. But in 2012, the company went bankrupt after an expensive recall of batteries it had made for Fisker Automotive; A123 was sold off in pieces. And with that, LFP was presumed dead—with its relatively low energy density and the stigma of the A123 bankruptcy, everyone assumed it simply wasn’t good enough.

Everyone, that is, except for the Chinese. Starting in the early 2010s, Chinese battery makers Byd and CATL assigned teams of researchers to improve LFP; the Chinese government subsidized the manufacture of the chemistry, especially for electric buses. By 2018, more than 90% of China’s new public buses had LFP batteries, and soon after that both Byd and CATL said they had achieved breakthroughs in boosting LFP’s performance for electric cars. CATL said some of its LFP batteries delivered 300 miles of driving range, and most of China’s EV companies now use the chemistry.

Last year, China became the world’s largest car exporter, and most industry analysts think Chinese EV makers such as Byd and Li Auto are likely to flood the world with their LFP-powered vehicles. To compete, Western automakers will also have to produce EVs and plug-in hybrids powered by LFP.

The infrastructure law signed by President Joe Biden in 2021 includes grant money to encourage LFP production. ICL Group, a specialty minerals company, last year broke ground on a $400 million LFP battery plant in St. Louis, half of which was funded under the infrastructure law. Over the last week, I asked industry hands and watchers whether the government should do more. I wondered whether, in the same way many countries view steel and cars as strategic industries, the U.S. should effectively designate LFP a strategic product and offer bigger incentives to produce it. Perhaps not surprisingly, Vivas Kumar, CEO of Mitra Chem, one of a handful of U.S. startups attempting to develop LFP, gave me a resounding yes. “LFP is the chemistry that is most relevant to the fastest-growing segments” of the industry, he told me.

Mitra recently opened an office in South Korea, whose battery and EV production qualifies for IRA tax credits because the country has a free trade agreement with the U.S. Kumar said he is researching South Korean manufacturing costs, and that Mitra may make its batteries there. “We’ll do whatever is going to give us the best probability of getting our product placed in the hands of a customer so that we can generate revenue at the cheapest cost possible,” he said. “We are focused on being an Inflation Reduction Act-compliant company, not necessarily exclusively a U.S. manufacturing company.”

Some independent analysts agree that the U.S. seems to lack a plan for establishing an LFP industry—and should have one. Corey Cantor, an EV analyst for BloombergNEF, a renewable energy research firm, noted that the three big South Korean battery makers—LG Energy Solution, Samsung and SK On—have said they’re working on LFP batteries but have shown no sign they’ll be producing any before the end of the decade. Likewise, Panasonic, Tesla’s main battery supplier, has announced no LFP plans. The ICL plant is the only U.S. LFP facility that’s received a grant or loan from the IRA or infrastructure law.

Cantor said the U.S. will only develop an LFP industry if the South Koreans move faster or U.S. startups get more government backing. “What is the U.S. strategy on LFP?” he asked. “Are they just going to continue to let CATL dominate it?”

About two years ago, CATL and other Chinese companies began to speak publicly about a tweak to LFP that juiced its energy density and driving range by adding manganese, another plentiful material. Such a battery, called LMFP, would boost LFP’s energy density by around 20% without creating supply chain issues, according to Steven Kaye, former chief technology officer at LFP cell developer Our Next Energy. An EV with such a battery could go 360 or so miles on a charge, thus matching many formulations of NMC, the higher-density battery chemistry favored by Western automakers. Last month, CATL announced a new LFP battery, the Shenxing Plus, which it said would deliver 375 miles on a charge; the company didn’t release details, but analysts said the Shenxing Plus was likely LMFP.

Battery makers have struggled to commercialize LMFP because the manganese gradually dissolves into the battery’s liquid electrolyte, and doesn’t conduct electricity as well as LFP, Kaye said. But Chinese battery makers began blending highly conductive NMC into the LMFP. The addition of a bit of nickel and cobalt resolved many of the battery’s shortcomings, he said.

Chinese automaker Chery reportedly plans to soon release an EV called the Luxeed S7 with an LMFP battery made by CATL. I asked Kaye why CATL appears to have figured out LMFP for EVs before Western companies. He noted the relative novelty of the chemistry that includes NMC, and said CATL’s scale gave it a manufacturing advantage, allowing it to commercialize faster than anyone else.

Mitra’s Kumar is skeptical. Just because CATL says it’s producing the chemistry, he said, doesn’t mean it’s ready for the global market. “LMFP is going through the same learning curve that LFP did,” Kumar said. He expects battery makers to gradually reduce the NMC content of LMFP until there is no nickel or cobalt in the chemistry, but says the process will take time.

But LFP and LMFP could relegate NMC to large SUVs and pickup trucks and high-end luxury EVs. Some industry watchers worry that the West is again letting opportunity pass it by, allowing China to get the spoils. “LMFP is in the beginning stages [in] China, but we shouldn’t wait until it’s good enough in China to start doing it in the West,” Kumar said. “We’ve already learned that lesson from seeing how LFP developed.”

LONDON, May 6 (Reuters) - Investors withdrew an estimated net $9.9 billion from hedge funds in March, up from $780 million in February and the 22nd consecutive month where industry outflows totalled more than inflows, a report from Nasdaq eVestment said on Monday.

While the scale of the March outflows was not historically high, money coming in from investors remained "consistently low" because of a "reluctance" to make meaningful new allocations, the report said.

The outflows came even as hedge funds posted positive performances across every strategy tracked by the data firm.

Alternative risk premia, a hedge fund strategy that trades stocks and derivatives in order to remain neutral to markets, had an almost 12% return for the quarter, said Nasdaq eVestment.

Managed futures, the next most successful trading strategy returned about 4% in March and were up about 9% for the year to March 31.

However, only four out of the 10 different kinds of trading strategies saw inflows including two kinds of bond trading hedge funds, making directional bets and trading between the relative prices of different bonds.

Multi-strategy hedge funds, which include some of the largest hedge funds in the world, saw the largest outflows in March of $2.7 billion, said Nasdaq eVestment.

However, estimated assets overseen by multi-strategy funds surpassed $700 billion in March to reach an all-time high.

This number includes leverage and performance as well as client inflows.

Lawmaker’s letter calls Moscow’s access to the satellite internet service in Ukraine a ‘serious national security threat’

Sen. Elizabeth Warren (D., Mass.) pressed the Pentagon to address Russian troops’ illicit use of Starlink internet terminals in Ukraine, calling the issue a “serious national security threat” to the U.S. and its allies.

In a letter addressed to Defense Secretary Lloyd Austin, Warren cited a Wall Street Journal investigation that illustrated how a black market of middlemen from the Middle East and elsewhere have funneled the compact satellite dishes into the hands of American adversaries and accused war criminals on the battlefields of Ukraine and Sudan.

Starlink, a part of Elon Musk’s SpaceX, has proved crucial for Ukrainian soldiers and civilians since Musk activated terminals there in the wake of Russia’s 2022 invasion. But officials in Kyiv complain that Russian forces’ recent use of the satellite links is erasing one of the defenders’ few strategic advantages.

The company supplies some devices to Ukraine through a $23 million contract with the Department of Defense. Other terminals in Ukraine come from donations by European governments and private-sector groups.

“As a DoD contractor, SpaceX cannot allow its products or services to be used to undermine national security,” Warren wrote. The letter asked the Pentagon to detail what it knows about Russian Starlink usage and the tools available to stop it.

A Pentagon spokesman said the department responds directly to members of Congress on such matters. “However, we can reinforce that we are aware of the reports that some Russian forces in occupied Ukraine have used Starlink terminals,” he said. “DoD has been working closely with SpaceX and the Government of Ukraine to investigate and address this threat.”

SpaceX has told regulators that its user agreements bar customers from using the service in unauthorized countries. Starlink lacks licenses to operate in China, Russia and many other countries, and U.S. export controls prohibit its sale in Russia.

Musk has said on the social-media platform X, which he also controls, that to the best of his knowledge, no terminals had been sold directly or indirectly to Russia and that the terminals wouldn’t work inside the country.

A thriving trade nevertheless continues to supply fresh Starlink terminals to Russian buyers, often by exploiting the service’s roaming feature.

The latest letter illustrates some U.S. officials’ growing discomfort with the commanding lead Musk’s space company has taken over its rivals. Once a scrappy startup, SpaceX now dominates the market for many commercial satellite launches. Its network of more than 5,000 Starlink satellites has also upended the market for broadband service from space by offering a relatively affordable, easy-to-install internet link.

Warren has pressed Musk’s companies on other fronts. In March, she renewed calls on the Securities and Exchange Commission to investigate whether Tesla violated rules governing board independence at public companies.

The Massachusetts senator and several colleagues in September asked the defense secretary to explain reports that Musk had shut off Ukrainian Starlink access in Crimea to prevent the country from attacking Russian ships. Musk told biographer Walter Isaacson he decided to limit the service to avoid what he considered an escalation in the conflict.

The WSJ’s investigation in early April also detailed the use of Starlink by rebel forces in Sudan, where the technology hasn’t been approved by the government. Nearly a week after the investigation, SpaceX began a crackdown on users who are connecting to its Starlink high-speed internet service from countries where it hasn’t been authorized.

Starlink customers there, as well as in Zimbabwe and South Africa, have received email notifications from the company, warning that their access to the service would be terminated. Those emails, viewed by the Journal, noted that using Starlink in areas where it hasn’t been approved by local regulators was against the company’s terms of service.

The ANC treats Anglo American as both national champion and national piñata

South Africa’s ruling party berates big business one minute and urges it to invest the next

Imagine making an offer on a house but only on condition that the owners demolish part of it first. That is a rough analogy for BHP’s £31bn offer for rival miner Anglo American, which includes the stipulation that first it jettisons its South African businesses.

South Africa’s presidency denies this is a vote of no confidence in the country. It is true that the motive for BHP’s offer is to get hold of Anglo’s sought-after copper mines in Peru and Chile. Yet it is hard not to see the proviso that Anglo ditches its South African platinum and iron ore assets as anything other than a comment on the country’s investment landscape.

As supposed evidence that the African National Congress enjoys close relations with business, the presidency this week cited co-operation between the administration and companies in tackling the country’s problems. The private sector has indeed provided expertise and finance to help solve three of the biggest: rolling power cuts, a collapse of rail and ports, and crime.

Yet these “collaborative efforts”, supposed evidence of them working hand in glove, are the result of failed ANC policies that have wrecked much of the country’s infrastructure. Business is helping out as a matter of survival.

Even when it turns to the private sector for help, the ANC has not managed to throttle the party’s old instincts of blaming it for all the country’s ills. When last year, Standard Chartered Bank paid a $2.35mn fine to settle an eight-year-old case of rand manipulation, Khumbudzo Ntshavheni, minister in the presidency, launched a withering attack on the entire private sector. It had “no interest in the development of this country”, she chastised, and was seeking to “engineer” government collapse.

Her remarks revealed the deep suspicion much of the ANC still has of the private sector. The prevailing attitude is that business, even foreign investors with no history or skin in the game, owes South Africa a living for the sins of the past.

Hardly surprisingly, the ANC’s relations with the mining sector have had their ups and downs. When it came to power after the country’s first free elections in 1994, the ANC rightly saw white-dominated businesses as having profited from exploiting cheap black labour. But much as it wanted to blame big business, it also needed its help. Only a profitable and confident private sector could pay enough taxes and provide enough employment to keep the ANC’s dreams of social transformation alive.

In 30 years, the ANC has never resolved those twin impulses. It oscillates between beating up big business and imploring it to invest.

The relationship with Anglo American follows a similar topsy-turvy trajectory. When in 2004, Tony Trahar, then Anglo’s chief executive, said political risk was declining, he was excoriated by Thabo Mbeki, then president, for saying that it existed at all. Trahar was wrong. Political risk was on the rise as the subsequent presidency of Jacob Zuma revealed.

The spectre of nationalisation has long hung, if mostly rhetorically, over the mining sector. The ANC made the state, not individual landowners, the custodians of the nation’s minerals. There was nothing wrong with that. But it did ensnare mining companies in the endless red tape of licence applications.

The mining industry no longer lays golden eggs — nor platinum or iron ones either if BHP’s snub is anything to go by. In 2003, South Africa accounted for 5 per cent of global exploration, a figure that dropped to below 1 per cent by 2023. The industry’s contribution to GDP and employment has dwindled inexorably.

These days, mines struggle to get minerals on freight trains and through backed-up ports. Miners generate their own power because they cannot rely on the state grid. Recently, in co-operation with government, they have provided private security to guard railway lines targeted by criminal gangs. It is co-operation of a sort, but born of desperation.

Anglo has made its own mistakes. It listed in London in search of cheap capital, but was never able to persuade foreign investors that its unwieldy structure made any sense. It splashed out on Brazilian iron ore, but was too timid in bidding for Australian iron ore assets that made its competitors rich.

Whatever errors Anglo made abroad, its battles at home with an ANC that saw it both as national champion and national piñata cannot have helped. Gwede Mantashe, mining minister, last week poured cold water on BHP’s offer, saying the Australian miner had never done much for South Africa. Though he didn’t say it, perhaps the begrudging inference was that Anglo American had.