Ex-CJI Chandrachud Opines Viceroy Report On Vedanta Group Questionable & Lacks Credibility

Ex-Chief Justice of India (CJI) D Y Chandrachud has dubbed the U.S short seller Viceroy Research's report on Vedanta Group as one which “lacks credibility”, while suggesting that the firm should be placed to seek legal remedies.  

Viceroy Research, which has targeted 29 global firms before Vedanta Group, was called Vedanta Resources (VRL) a 'parasite', and a 'financial zombie’.

The Viceroy Research report has accused VRL of draining VEDL, forcing it to take on more debt and deplete its cash reserves, impaired creditors’ ability to recover their principal, a situation that resembled a ‘Ponzi scheme’, it said.

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

As per the filing, the former CJI stated that the dubious credentials of researchers behind the aforementioned report "raise preliminary concerns about the credib ility of the report."

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"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 ex-CJI opined.  

Further, he notified that sevral instances of penalties being imposed on Viceroy have taken place for artificially distorting share price and disseminating false or misleading reports.

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.”

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.