Vedanta Group Structure Unsustainable: Shortseller

Anil Agarwal-led group says allegations aimed at discrediting it

- ARSHAD KHAN @ New Delhi

US-based investigative financial research Viceroy Research has alleged the entire group structure of Vedanta is "financially unsustainable, operationally compromised, and poses a severe, under-appreciated risk to creditors". In its report, Viceroy said that Vedanta Resources "resembles a Ponzi scheme".

Viceroy said on Wednesday it is shorting the debt stack of Vedanta Resources (VRL), the parent company and majority owner of Vedanta Ltd (VEDL). It described VRL as a holding company with no major operations of its own, dependent on extracting cash from VEDL to meet its obligations. "The core of our investment thesis rests on a simple but critical dynamic: VRL is a "parasite" holding company with no major operations of its own, propped up by cash extracted from its dying "host": VEDL."