Mumbai: The Mumbai bench of the National Company Law Tribunal (NCLT) on Wednesday asked Vedanta Ltd to respond within four weeks after the Union ministry of petroleum and natural gas objected to its upcoming demerger, potentially delaying the process and injecting uncertainties into the company’s plan first announced two years ago. 

The case, heard by a bench of justices Mohan Prasad Tiwari and Charanjeet Singh Gulati, is next listed for hearing on 17 September. 

A delayed timeline

The development could push back the timeline for Vedanta’s demerger. The company had first announced its plan to demerge into six separately-listed entities in September 2023. It had aimed to complete the demerger by March 2025.

However, last December, it estimated that the demerger would be delayed to September 2025 due to pending regulatory approvals—particularly from the NCLT.

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A spokesperson for Vedanta confirmed that the petroleum ministry had filed a representation before the NCLT. 

“Further, Sebi (Securities and Exchange Board of India) in its affidavit has confirmed that it has no further comments on the merits of the (demerger) scheme and that the tribunal may proceed to adjudicate the matter. Also, Vedanta has already received NOC (no-objection certificate) from the stock exchanges on the modified scheme,” the spokesperson said. 

Mint independently could not ascertain the details of the petroleum ministry’s objections. 

However, market regulator Sebi’s assent to the demerger stands, said a person aware of the matter. 

Shares of Vedanta Ltd settled 1% lower at ₹445.45 apiece on the BSE on Wednesday. 

On 13 August, Sebi had issued an administrative warning to Vedanta, as per regulatory disclosures made by the company. The market regulator said that the company changed or modified its demerger plan after getting a no-objection certificate from the BSE without the written consent of Sebi. 

The changes pertain to the now-cancelled demerger of its base metals business. Originally, the company planned to demerge into six separately-listed entities. However, in December last year it decided to retain the base metals business in the parent firm and changed the demerger plan to five companies. 

The five firms will be Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Iron and Steel and Vedanta Ltd, which will continue as the parent entity and hold the shares of Hindustan Zinc. Shareholders of Vedanta will receive one share in each of the new companies.

“The above non-compliance has been viewed seriously. Accordingly, the Company is hereby warned and advised to be careful in future to avoid recurrences of such lapses,” Sebi wrote in its letter, a copy of which was uploaded by Vedanta Ltd on the stock exchanges. The letter did not mention what the change or modification to the demerger plan was. 

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The court has asked Sebi to file its affidavit within two weeks. 

Earlier, Viceroy Research, a US-based short-seller firm had 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 issues. The short-seller first published its note on Vedanta on 9 July and has since published 21 notes on the Vedanta group. 

Viceroy has a short position against the London-based Vedanta Group’s holding firm Vedanta Resources’ bonds. It claims to have no exposure to the group’s two listed firms in India.