Mining giant Vedanta Ltd rejected Viceroy Research’s allegations about the company’s subsidiary Vedanta Semiconductors Pvt. Ltd (VSPL) routing ₹2,500 crore loans in a ‘sham operation’, stating that the loan transactions were executed in full compliance with the applicable laws, reported the news agency PTI on Sunday.
Vedanta “strongly rejects the baseless allegations made in the report regarding Vedanta Semiconductors Pvt Ltd (VSPL),” the report citied a statement by company’s spokesperson.
“All business activities of VSPL have been transparently disclosed and are in line with statutory norms,” the company said.
The company spokesperson added that Vedanta Ltd. and VSPL have ‘consistently reported’ the accurate transaction terms, rates, and collateral as per the mandated norms.
“Loans between VSPL and Vedanta Ltd were executed in full compliance with applicable laws, corporate governance standards, and both Vedanta Ltd and VSPL have consistently reported accurate loan terms, interest rates, and collateral in line with statutory norms,” a Vedanta spokesperson told the news agency.
The company also reportedly asked the stakeholders to rely on verified disclosures and audited financial statements.
Viceroy Research openly disclosed its short position against the debt of Vedanta Resources, the parent company of the Indian mining giant, on 9 July 2025, when they claimed that the company is “systematically draining” its Indian subsidiary.
Viceroy Research’s allegations
In the latest development on the allegations saga, the US-based short sellerViceroy Research, alleged that under the pressure to pay the brand fees, Vedanta Ltd routed ₹2,500 crore
“Under pressure to pay brand fees, VEDL routed a ₹2,500 crore loan through a company doing ₹416 crore in sham operations, hoping regulators didn’t look,” said the short seller in its latest report. Viceroy Research released its latest report titled “Vedanta – Vedanta Semiconductor: ₹2,500 Crore Dhoke ka Sammraajy ”on Friday, 18 July 2025.
The report further alleged that VSPL is a “sham commodities trading operation” which has been designed to avoid the classification of coming under a non-banking financial company (NBFC).
“We believe that Vedanta Limited (VEDL) subsidiary, Vedanta Semiconductors Private Limited (VSPL), is a sham commodities trading operation designed to improperly avoid classification as a Non-Banking Financial Company (NBFC),” they said in the report.
They also claimed that the alleged loan routing was devised to facilitate Vedanta’s remittance of brand fees to its parent company when it faced a severe liquidity crunch.
“This scheme was devised to facilitate VEDL’s remittance of brand fees to Vedanta Resources’ (VRL) in April 2025, when it faced a severe liquidity crisis,” said Viceroy.
Viceroy’s strike on Indian regulators
According to the report released on Friday, the short seller claims that Vedanta Semiconductors Private Limited needs an “operational illusion” of 24 months or 2 years to fulfil its dues to its offshore lenders and hide the “near-catastrophe” of April 2024.
They also said that even though the credit rating analysts are ‘snoozing through the alarm bells,’ the Indian regulators are ‘famously light sleepers.’
“VSPL’s operational illusion needs 24 months of regulatory silence to fulfil its purpose, repaying its offshore lenders and hiding the near-catastrophe of April 2024. While credit analysts are snoozing through the alarm bells, India’s regulators are famously light sleepers,” claimed the short seller in its latest report.
In April 2024, the company faced a severe liquidity crisis. The loans granted were allegedly used to fund the May dividend issue and not to pay the brand fees.
“The loan was intended to be used to send up the brand fees but, by the time JPM had sold the debt in the market, they had already been paid so the loan was used to fund the May dividend,” claimed the sort seller in the research report. “In response, VEDL reactivated VSPL, not as a semiconductor venture, but as a zero-margin trading entity whose operations appear to consist entirely of paper-based commodity trading.”
Vedanta share price closed 0.33% higher at ₹445.70 after Friday’s stock market session, compared to ₹444.25 at the previous market close, according to BSE data.