Former CJI D.Y. Chandrachud criticized Viceroy Research’s report on Vedanta, calling it unreliable and suggesting legal action. Vedanta says the report spreads false claims without contacting them.
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NEW DELHI: Former Chief Justice of India (CJI) D.Y. Chandrachud has said that the report written by U.S.-based short seller Viceroy Research about the Vedanta Group “lacks credibility“.
He shared his legal opinion after Vedanta asked him to give an independent view on the serious claims made in the report.
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The former CJI has also said that Vedanta has a strong legal ground to take action against the firm.
In a regulatory filing, Vedanta said it asked Justice Chandrachud for a legal opinion about the report published by Viceroy Research. The ex-CJI looked into the claims and the background of the people behind the report and raised doubts about their reliability.
He said the people behind the report do not seem trustworthy, and that this raises “preliminary concerns about the credibility of the report.”
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He also clearly stated-
“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.”
He added that there are many past examples where Viceroy Research was fined or penalized for making false and misleading reports and for trying to change share prices artificially.
Justice Chandrachud strongly criticized the language used in the report. He said the Viceroy report made very serious accusations and harmed Vedanta’s name and its business.
He explained that the report used words like “ponzi scheme” and “parasite”, which damaged Vedanta’s image.
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He stated,
“The report contains serious imputations such as ‘ponzi scheme’ and ‘parasite’, which have caused harm to querist’s (Vedanta’s) business and reputation,” and also said, “In these circumstances, the querist would be well-placed to seek legal remedies.”
Viceroy Research had targeted Vedanta Resources Ltd (VRL), which is the UK-based parent company of Indian-listed Vedanta Ltd. The report made harsh claims against VRL, calling it
“A house of cards built on a foundation of unsustainable debt, looted assets, and accounting fiction.”
It also said that the group was draining its Indian unit (VEDL), increasing its debts, using up cash reserves, and making it hard for lenders to recover their money.
The report even compared the situation to a “Ponzi scheme”.
Before Vedanta, Viceroy had already gone after 29 other international companies using similar methods.
In its response, Vedanta had said the report was “a malicious combination of selective misinformation and baseless allegations” and that the authors did not even try to contact the company before publishing it.
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