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HomeMarket NewsVedanta shares fall sharply after government flags disclosure violation, blocks misrepresentation at NCLT
Vedanta, in its response to the NCLT stated that all creditors and stakeholders have agreed to the demerger and that the company is ready to give corporate guarantees to secure the government's dues.
Shares of Vedanta Ltd. fell as much as 3% on Wednesday, September 17, after the government flagged multiple issues with regards to its demerger at the Company Law Tribunal (NCLT) during the hearing which was scheduled for today.
The four major issues flagged by the government include:
Financial risk post the demerger
Misrepresentation of hydrocarbon assets, stating that the rosy picture presented by the company is misleading.
Insufficient disclosure of liabilities and
Violations of SEBI's disclosure norms.
The Government claims that the demerged entity of Malco Energy is likely to go into liquidation and will make the process of recovery of government dues virtually impossible.
The government claims that the asset coverage falls dramatically if he demerger is done, claiming that Vedanta has assets of over ₹2 lakh crore, which is 12.3 times higher than the total government demand of ₹16,000 crore.
In its arbitral dispute, the government has raised claims of over ₹5,900 crore, which, according to the government, has not been disclosed by the company.
The government further claims that the demerged entity Malco, has assets of only ₹29,000 crore and negative net worth as of Mach 2024.
Vedanta misrepresented the blocks sanctioned for exploration as their assets and that they have take "massive loans" on these "assets", the government stated, adding that this was done without the government's approval.
Vedanta, in its response to the NCLT stated that all creditors and stakeholders have agreed to the demerger and that the company is ready to give corporate guarantees to secure the government's dues.
Vedanta further stated that there is no legal requirement for any further disclosure, adding that the government is not rejecting the scheme or is opposed to the demerger scheme.
A spokesperson of Vedanta told CNBC-TV18 that SEPCO has withdrawn is intervention application, while the ministry of petroleum and natural gas has made its representation during proceedings at the NCLT.
The spokesperson added that Vedanta's legal counsel provided the necessary clarifications in response and the scheme has been listed for final hearing on October 8, 2025.
Shares of Vedanta fell as much as 3% before a small recovery from the lows, currently trading 2.4% lower at ₹450.3.
First Published:
Sept 17, 2025 2:16 PM
IST
