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Vedanta's proposed demerger is under review by the NCLT, which has reserved its order after a brief hearing. The Ministry of Petroleum and Natural Gas flagged concerns over financial risks, alleged misrepresentation of hydrocarbon assets, and incomplete disclosure of liabilities. Vedanta stated it has followed all regulatory norms, with SEBI approving the revised plan. The restructuring aims to create independent, sector-focused entities while streamlining operations and enhancing shareholder value. The original plan to carve out the base metals business has been revised, retaining it within the parent company.
The National Company Law Tribunal (NCLT) recently held a hearing on Vedanta's proposed demerger and has reserved its order. The company had approached the tribunal seeking regulatory approvals under Section 230-232 of the Companies Act for restructuring its business. Advertisement
During the hearing, the Ministry of Petroleum and Natural Gas (MoPnG) raised concerns about potential financial risks following the demerger. The ministry's legal counsel highlighted alleged misrepresentation of hydrocarbon assets and insufficient disclosure of liabilities. They also requested clarity on matters such as exploration blocks being shown as Vedanta's assets and details of loans taken based on those assets.
Vedanta's representatives stated that the company has complied with all regulatory norms. They further informed the tribunal that the Securities and Exchange Board of India (SEBI) had cleared the revised demerger plan, following earlier observations on disclosure and compliance. A company spokesperson emphasized that Vedanta remains committed to creating independent, sector-focused entities in aluminium, oil and gas, power, and iron and steel.
The original scheme filed by Vedanta included four group companies: Vedanta Aluminium Metal, Talwandi Sabo Power, Malco Energy, and Vedanta Iron and Steel, along with provisions for their shareholders and creditors. Earlier objections from the Ministry of Petroleum and Natural Gas and questions from SEBI had delayed approvals. Notably, the initial plan had envisioned six separate entities, including a carve-out for Vedanta Base Metals, which has now been retained within the parent company in the revised scheme.
The demerger is intended to streamline operations, enhance management focus, and unlock value for shareholders. Earlier this year, the deadline for completing the restructuring was extended to September 30, 2025, due to pending approvals from the NCLT and other government agencies.
Source PTI
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