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The Singapore Police Force (SPF) is examining a complaint by short-seller Viceroy Research, which alleged that India-based natural resources company Vedanta Ltd improperly funded its 2024 dividend, according to documents reviewed by Reuters.
Vedanta told Reuters that it had paid all dividends fully in line with applicable laws, calling Viceroy’s claims “baseless”.
“We maintain that the allegations in the short seller’s dubious ‘reports’ are malicious and ill-informed, and the company unequivocally rejects them,” the company said. It added that there was no ongoing SPF investigation and that it had not been contacted by Singapore Police. Vedanta had previously dismissed separate allegations by Viceroy in July.
Allegations of artificially boosted dividends
In a letter dated August 7 to the Singapore Police Force, Viceroy alleged that Vedanta artificially supported its dividend using a $900 million loan from Oaktree Capital Management.
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The short seller claimed that the $20 billion company manipulated its accounting to inflate reserves on paper, allowing dividend payouts that were not backed by actual cash earnings. According to Viceroy, Vedanta later repaid the loan and reversed write-offs through entities based in Singapore.
Viceroy said its conclusions were based on publicly available reports, forensic analysis of Vedanta’s filings, and site visits to its assets.
The SPF assigned Viceroy’s complaint a reference number, indicating that the matter is under review, Reuters reported.
UK-based Vedanta Resources owns 56 per cent of Vedanta Ltd, while the remaining shares are held by institutional investors.
Previous short-seller allegations
In July, short-seller Viceroy Research announced it had taken a short position in Vedanta Resources’ debt, accusing the UK-based parent of “systematically draining” its Indian arm. Vedanta Ltd denied the allegations.
In a detailed note, Viceroy questioned the financial stability and governance of the Vedanta Group. “The entire group structure is financially unsustainable, operationally compromised and poses a severe, under-appreciated risk to creditors,” the report mentioned.
According to the firm, Vedanta Resources Ltd (VRL) has been “systematically draining” Vedanta Ltd (VEDL) to meet its rising debt obligations. This, it claimed, forced the Indian unit to borrow more and draw down cash reserves, further straining its balance sheet.
The 87-page report also accused the group of overstating profits by capitalising expenses at its operating subsidiaries. “This is a material misrepresentation,” Viceroy said.
Vedanta dismisses report as propaganda
The document highlighted a $5.6 billion gap between VEDL’s free cash flow and the dividends it paid over the past three years. It also flagged that the company’s net debt has jumped 200 per cent — about $6.7 billion — since FY22, including changes in working capital. VEDL, the report added, has nearly exhausted its cash reserves and reached its borrowing limits.
Responding to the allegations, a Vedanta Group spokesperson dismissed the report as “a malicious combination of selective misinformation and baseless allegations to discredit the group”. The company further said the report was issued “without any attempt to contact us” and appeared “solely intended to create false propaganda”.
Corporate restructuring and debt reduction
Vedanta Ltd has faced pressure after the Indian government objected to a 2023 demerger plan by Chairman Anil Agarwal, which proposed splitting the group into four separate entities. This followed an unsuccessful attempt to take the group private three years earlier.
As part of the plan, Vedanta Resources announced last year it would focus on reducing debt, aiming to cut net debt by $1.2 billion to $11.1 billion in fiscal 2025.
[With agency inputs]
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