The Supreme Court of India on Friday rejected a Public Interest Litigation (PIL) seeking a court-monitored investigation into allegations leveled by US-based short-seller Viceroy Research against the Vedanta Group. A bench of Justices P.S. Narasimha and A.S. Chandurkar questioned the motives of foreign entities in interfering with Indian affairs. The court allowed the petitioner, advocate Shakti Bhatia, to withdraw the petition after expressing its disinclination to entertain the matter.
Bhatia's PIL requested a thorough investigation by the Securities and Exchange Board of India (SEBI), the Reserve Bank of India (RBI), and the Ministry of Corporate Affairs into Vedanta Limited, Hindustan Zinc Limited, Vedanta Resources Limited, and their related entities. The petition referenced a research report published by Viceroy Research LLC on July 9, 2025, which alleged fraud, financial manipulations, price rigging, and regulatory violations by the Vedanta Group.
Senior Advocate Gopal Sankaranarayanan, representing the petitioner, clarified that the plea sought a limited direction for SEBI and RBI to examine the allegations, not an endorsement of Viceroy's findings or a court-monitored probe similar to the Adani-Hindenburg case. He argued that regulatory agencies should respond to the concerns raised and potentially file a report giving a clean chit.
Solicitor General Tushar Mehta, representing the Centre, opposed the plea, calling the PIL not bona fide and suggesting it was orchestrated by the foreign short-seller itself. He argued that there was a systematic pattern of outside agencies writing reports to influence the Indian stock market and that these institutions lack credibility. Mehta also pointed to an email written by Viceroy to the SEBI chairperson and other authorities just after the petition was filed in the apex court. He stated that the Supreme Court should not be taken "on a joyride".
Viceroy's 87-page report, titled "Vedanta – Limited Resources," made several accusations against the Vedanta Group. These included regulatory violations, unauthorized foreign transfers, opaque auditor networks, and fund diversion through brand fees, while also flagging excessive leverage and weak disclosure norms. The report claimed that Vedanta Resources Limited, the unlisted holding company, had minimal operational activity and depended largely on cash flows from its listed arm, Vedanta Limited. It also alleged that Vedanta Resources and its holding companies had gross interest-bearing liabilities of USD 4.9 billion as of FY 2025. Furthermore, it claimed Vedanta Limited had advanced loans of about USD 956 million to Vedanta Resources and its subsidiaries, which were used to purchase Vedanta Limited's own shares from the open market, increasing the promoter's stake from 50% to 69%. Viceroy also targeted Group Chairman Anil Agarwal, claiming that several high-profile ventures — in semiconductors and nuclear power — had failed to materialise, with borrowed funds allegedly routed back to the parent company. Vedanta has denied all allegations.
The Supreme Court's decision highlights its reluctance to intervene in matters falling under the jurisdiction of financial regulators like SEBI and RBI. The bench indicated that regulators could act independently if they found grounds for investigation. The dismissal also raises concerns about the influence of foreign entities on Indian markets through the publication of research reports and subsequent legal actions.
