Viceroy report on Vedanta ‘lacks credibility’, says ex-CJI Chandrachud

Former Chief Justice of India D Y Chandrachud advised the company to consider legal action, stating the report harms Vedanta's reputation and business interests

New Delhi: US short seller Viceroy Research’s report on the Vedanta Group “lacks credibility” and the firm would be well-placed to seek legal remedies, former chief justice of India D Y Chandrachud has said.

Justice Chandrachud’s remark came after Vedanta sought an independent legal opinion from the former chief justice in relation to the allegations made in the Viceroy Research report, the company said in a regulatory filing on Friday.

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According to the filing, the former CJI has opined that “Viceroy has a track record of taking short positions in listed companies and then publishing misleading reports to profit unlawfully from the resulting market impact”.

The Viceroy Research’s report on the company contains serious allegations, causing harm to the Vedanta Group’s business and reputation, Justice Chandrachud said. “The report contains serious imputations such as “ponzi scheme” and “parasite”, which have caused harm to querist’s (Vedanta’s) business and reputation,” he said, adding, “in these circumstances, the querist would be well-placed to seek legal remedies.”

The US short seller in its July 9 report had called billionaire Anil Agarwal-led British firm Vedanta Resources a “parasite” that is “systematically draining” its Indian unit, an allegation which the group called as “selective misinformation and baseless” aimed at discrediting the firm.

Viceroy Research took a short position against the debt of Vedanta Resources, the UK-based parent of Indian miner Vedanta Ltd, alleging that the group “is a house of cards built on a foundation of unsustainable debt, looted assets, and accounting fiction”.

Vedanta had responded, saying the report was “a malicious combination of selective misinformation and baseless allegations” and that its authors issued it without contacting the group.