New SC Bench to Hear PIL Against Vedanta After Judge Recuses

A new bench of the Supreme Court will hear a public interest litigation (PIL) seeking an investigation into the Vedanta Group over allegations made by US-based short-seller Viceroy Research, the apex court said on Monday. This comes after Justice K Vinod Chandran recused himself from hearing the matter. No reason was provided for his decision.

The case, filed last month, relies on allegations by Viceroy Research, which earlier this year claimed that Vedanta and its subsidiaries engaged in fraud by moving money through disproportionately large dividends and artificial brand fees. The short-seller, in a series of reports, also raised questions about the company’s holding structure.

The PIL, filed by Shakti Bhatia, was initially listed before a bench comprising Chief Justice of India BR Gavai, Justice K Vinod Chandran and Justice Atul S Chandurkar. The matter will now be placed before another bench. The PIL has been filed with the assistance of Advocate-on-Record Shyam D Nandan.

The petitioner has sought directions to SEBI, the RBI and the Ministry of Corporate Affairs (MCA) to investigate alleged fraud, financial manipulations, price rigging and regulatory violations involving Vedanta Limited, Hindustan Zinc Limited and Vedanta Resources Limited.

According to the plea, the Delaware-based financial research firm and short-seller published a report on 9 July 2025 alleging fraud, market manipulation, price rigging and regulatory breaches by the companies in question.

The petition claims that Viceroy informed the relevant regulatory bodies about these alleged financial violations but no action was taken. It states: “Viceroy published articles and filed complaints with SEBI and the RBI. However, there was no response. The petitioner later came across a news article in the Economic Times stating that Viceroy is still awaiting a response from SEBI and has offered assistance to verify the findings of its 9 July 2025 report.”

What Viceroy Claimed

In its report, Viceroy alleged that Vedanta Resources is financially unsustainable and survives only by drawing cash from its operating arm, Vedanta.

“Vedanta Resources is a parasite holding company with no meaningful operations of its own, propped up entirely by cash extracted from its dying host, that is, Vedanta,” the report said. “This creates a self-destructive feedback loop.”

According to Viceroy, Vedanta Resources cannot meet its short-term financial obligations without draining Vedanta — a structure it claims puts the entire group at risk. “This threatens Vedanta as a going concern,” it noted, adding that the arrangement strongly resembles a Ponzi scheme.

The Anil Agarwal-led firm has denied the allegations, calling them “false propaganda.”