Govt flags risks in Vedanta’s demerger

Vedanta Ltd’s proposed demerger has come under fresh scrutiny, with the ministry of petroleum and natural gas (MoPNG) raising objections before the National Company Law Tribunal (NCLT).

- Priyanka Gawande

At a hearing on Wednesday, the ministry alleged Vedanta had painted a misleading “rosy picture” of the proposed demerger, and had not fully disclosed regulatory and financial risks. The Anil Agarwal-led company denied the allegations.

Vedanta’s shares fell nearly 4% after the news and ended over 1% lower. The objections came on Vedanta's application seeking NCLT nod for its proposed demerger under section 230-232 of the Companies Act.

“Whoever intends to merge/ demerge must come with clean hands. They must ensure transparency and put forth correct facts before all the stakeholders and the board before a scheme is approved," the ministry said. “It must place all facts on records before Sebi and BSE, so that a proper no-objection is obtained.”

Shares of Vedanta Ltd fell nearly 4% following the news, but recovered to end the session over 1% lower.