Viceroy Research alleges Vedanta’s chip unit was set up to bypass NBFC regulations; Vedanta calls claims ‘baseless and misleading’
New Delhi (Economy India): In a serious allegation that could impact investor sentiment, US-based forensic financial research firm Viceroy Research has accused Vedanta Group, led by billionaire Anil Agarwal, of engaging in a Rs2,500 crore fraud through its semiconductor subsidiary.
Viceroy claimed in its latest report that Vedanta’s chip unit was never a legitimate business enterprise. Instead, it alleges the company was created solely to avoid classification as a non-banking financial company (NBFC) and was involved in a “fictitious commodity trading operation.”
The report says, “Our research indicates that Vedanta’s semiconductor division was established with the sole purpose of avoiding regulatory scrutiny. It was used as a vehicle for manipulating internal transactions.”
However, Vedanta Limited swiftly denied the allegations, calling the report “factually incorrect, misleading, and malicious.” The company asserted that it follows the highest standards of corporate governance and transparency, and that its semiconductor investment strategy is legitimate and forward-looking, in line with India’s push for electronics manufacturing.
The semiconductor arm of Vedanta has been in the spotlight due to the Indian government’s incentives for domestic chip production under the Semicon India Program, with investments running into billions.
Vedanta clarified that its joint venture with Foxconn for setting up a semiconductor fab in Gujarat is fully compliant with all regulations and under active development. The company added that it is “committed to building a sustainable semiconductor ecosystem in India.”
Meanwhile, financial analysts caution that while Viceroy’s past reports have exposed valid concerns about companies globally, some have also been known to serve short-sellers. The timing and intention of the report may warrant scrutiny.
Market Impact:
Despite Vedanta’s denial, shares of the company witnessed minor volatility on stock exchanges, reflecting investor caution. Analysts believe the allegations may not have material long-term impact unless regulatory investigations are triggered.
🧾 Background:
• Vedanta has previously faced criticism for high debt levels, corporate governance practices, and opaque internal transactions.
• The company has pledged over $20 billion in investment in semiconductors and electronics through its various entities.
• Viceroy Research is known for exposing alleged frauds like Wirecard and Steinhoff International, but its methods have also drawn legal scrutiny.
(Economy India )
