Govt Flags Concerns Over Vedanta Demerger, Hearing Deferred to September 17

The government has raised objections to Vedanta’s proposed restructuring plan, alleging concealment and non-disclosure of material information in its demerger scheme, according to CNBC-TV18 on Wednesday.

The matter was heard at the National Company Law Tribunal, where officials flagged concerns over inflated revenues and hidden liabilities. Government representatives argued that Vedanta modified key aspects of its scheme after receiving a no-objection certificate from SEBI and stock exchanges. SEBI confirmed that changes were made after clearance, terming it a breach of its master circular. The regulator said it had issued an administrative warning to Vedanta and added that such modifications should have been placed before the company’s board for approval.

Taking note of these objections, the tribunal deferred the matter to 17 September.

Vedanta’s Response
Vedanta said it has filed a detailed reply to the government’s representation and is ready to provide a corporate guarantee to the Ministry of Petroleum and Natural Gas to cover possible liabilities under oil and gas contracts. The company maintained that the planned demerger is a strategic step to unlock long-term value and clarified that Sebi has no further comments on the scheme.

Vedanta also said the Supreme Court’s August 19 ruling relates to an old matter involving Talwandi Sabo Power and has no impact on the demerger.

Background
Vedanta announced the demerger in September 2023, proposing a split into four listed entities focused on aluminium, oil and gas, power, and base metals. The completion deadline, initially set for March 2025, has been extended to 30 September 2025, pending approvals including tribunal clearance.

The plan has secured broad shareholder and creditor support. Investors will receive one additional share in each of the new companies.