Vedanta shares fell 2% sharply after the company’s proposed demerger plan faced serious objections from the Central government as well as a ‘warning’ issued by market regulator SEBI. The development has cast fresh uncertainty over the mining major’s restructuring move.
During the latest hearing before the National Company Law Tribunal (NCLT), the Centre strongly opposed Vedanta’s demerger scheme, stating that it had “serious objections” to the way the company presented its plan. Government representatives argued that the scheme could hinder the recovery of dues and pointed to alleged concealment and non-disclosure of critical details. They further flagged concerns over “inflated revenues” and “concealed liabilities.”
The Centre also highlighted that Vedanta made modifications to its demerger scheme after receiving a No Objection Certificate (NOC) from SEBI and the stock exchanges, which it claimed undermines transparency.
Confirming these concerns, SEBI told the tribunal that Vedanta had indeed altered its scheme post-NOC, terming it a “serious breach” of the regulator’s Master Circular. SEBI also revealed that it had issued an administrative warning to Vedanta, stressing that such modifications are not permissible once a clearance has been granted. SEBI added that the company is required to place the regulator’s warning before its Board of Directors.
Given the mounting objections, the NCLT has deferred further hearing on the matter to September 17, prolonging the uncertainty for Vedanta and its investors.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information.
