Viceroy says more on Vedanta soon

Group denies charges as US co shorts bonds, alleges misconduct

- Nehal Chaliawala, Varun Sood & Satish John

American short-seller Viceroy Research said there is “more to come” after Monday's damaging report on Vedanta Group, a day before Group chairman Anil Agarwal faces shareholders of Vedanta Ltd at the resources company's annual meeting.

The short-seller, which has previously targeted Wirecard and Truecaller, on Wednesday accused Vedanta Group of alleged financial misconduct and misrepresentation, making empty promises to shore up share prices, manipulating asset values, raising off-balance sheet loans, and corporate governance lapses.

Vedanta Group denied all the allegations, calling the report a “malicious combination of selective misinformation and baseless allegations to discredit the Group”. The timing of the report was suspicious, the conglomerate said, adding that it may undermine its forthcoming corporate initiatives.

Mumbai-listed Vedanta Ltd (VEDL), which is preparing to demerge into five companies, closed 3.38% lower on the BSE on Wednesday after crashing nearly 8% intraday, while another group company, Hindustan Zinc Ltd, fell 2.56%.

"We wouldn't expect much of a (market) reaction initially. It's going to take people some time to digest,” said Fraser Perring, co-founder of Viceroy Research.

“There is more to come,” Perring said over the phone from London, hinting at a series of reports on the conglomerate. He rejected Vedanta Group's allegations around the report's timing.

In April, Viceroy Research took a short position on the bonds of Vedanta Resources, the London-based unlisted holding company of the Vedanta Group, Perring said, without disclosing the quantum of his firm's exposure. The short-seller has no exposure to the publicly traded shares of Vedanta Ltd or Hindustan Zinc, he added.