Another Supreme Court Judge, Justice Sanjay Kumar, recuses from hearing Vedanta fraud allegations PIL based on Viceroy Research Report, seeking SEBI and RBI probe into financial irregularities.
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NEW DELHI: The Vedanta Group, comprising Vedanta Limited, Hindustan Zinc Limited, Vedanta Resources Limited, and associated entities, is facing fresh scrutiny after a Public Interest Litigation (PIL) called for a thorough probe by SEBI, RBI, and the Ministry of Corporate Affairs (MCA) into its financial dealings.
Filed by petitioner Shakti Bhatia, the PIL has put a spotlight on the inaction of regulatory bodies despite serious allegations raised by international research firms.
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On September 8, 2025, a bench led by Chief Justice of India Justice Gavai, along with Justice Vinod Chandran and Justice Chandurkar, heard the matter. However, Justice Vinod Chandran recused himself. Now, Justice Sanjay Kumar has also recused, leaving the matter to be re-listed before another bench.
These recusals highlight the sensitivity of the case and the powerful forces at play.
The PIL relies on a damning July 9, 2025, report by U.S.-based investigative firm Viceroy Research LLC, which accused the Vedanta Group of:
“Commission of fraud, financial manipulations, price rigging, and regulatory violations”
The petitioner argued that Viceroy had even filed complaints with regulators, but:
“Upon perusal of the Report dated 09.07.2025, available in the public domain, it appears that there are certain financial irregularities within the Vedanta Group… yet SEBI and RBI have not responded.”
The plea draws attention to the government’s significant financial interest in Vedanta subsidiaries:
- Hindustan Zinc Limited (HZL): Government holds a 29.54% stake.
- Bharat Aluminium Company (BALCO): The Government is a 49% majority stakeholder.
The petitioner warned:
“Any irregularities in operation of the said companies will not only prejudice the minority shareholders and public at large but will also hamper the government money which shall result in major repercussions to the economy and the various government policies.”
The PIL also pointed to Vedanta’s controversial corporate history:
- De-listed from the London Stock Exchange in 2018 – once hailed as the highest-grossing IPO by a non-UK company, but later withdrawn.
- Current de-merger application before NCLT, Mumbai, raising suspicions of financial restructuring to escape scrutiny.
According to the plea:
“This is buttressed by the fact that Vedanta Resources was de-listed from the London Stock Exchange in 2018… and now Vedanta has filed an application before the NCLT for de-merger of its various entities.”
The petition aims at India’s regulators:
“The inaction on part of SEBI and other regulatory authorities in the present scenario also lays down the major problem with privatization of government entities.”
It further emphasized that a serious investigation is in the national interest:
“Investigation by SEBI would not only protect the shareholders and investors of Vedanta Limited but will also protect the stake of Government of India in such companies as well as other minority shareholders.”
Background of the Allegations
On July 9, 2025, Viceroy Research LLC released an 87-page report titled “Vedanta – Limited Resources”. The report accused Vedanta and its affiliates of large-scale fraud, financial manipulation, and regulatory violations. Among the serious claims were:
- Fraudulent and unfair trade practices under SEBI’s PFUTP Regulations, 2003.
- Misrepresentation of financial disclosures and diversion of funds via brand and management fee arrangements.
- Misuse of upstream dividends and creation of improper encumbrances undermine shareholder rights.
- Failure to disclose material events as per SEBI’s LODR Regulations, 2015.
- Opaque audit structures obscure liabilities and evade oversight.
The report also pointed to inflated asset valuations, undisclosed liabilities, systemic capitalization of expenses, and questionable donations to promoter-linked entities.
Following its findings, Viceroy Research sent detailed complaints to the Securities and Exchange Board of India (SEBI) on July 14 and the Reserve Bank of India (RBI) on July 15, 2025. The firm later published the letters online, citing the seriousness of the allegations and a lack of visible regulatory response.
Vedanta, on its part, obtained a legal opinion from former Chief Justice of India DY Chandrachud, who advised that the company could initiate a defamation case against Viceroy. However, Viceroy dismissed the legal opinion, continuing to stand by its report and criticisms.
The PIL by Advocate Shakti Bhatia
Advocate Shakti Bhatia filed the present PIL, naming the Union of India, SEBI, RBI, and the Ministry of Corporate Affairs (MCA) as respondents. In his petition, Bhatia claimed to have independently corroborated parts of the Viceroy report, especially concerning undisclosed related-party transactions. By analyzing MCA21 filings, SEBI disclosures, and Registrar of Companies records, he alleged that certain high-value transactions were conducted with undisclosed counterparties, bypassing mandatory shareholder approvals.
According to Bhatia, such practices, if proven, would constitute breaches of the Companies Act, 2013, and SEBI’s LODR Regulations. He argued that these actions amounted to financial fraud with the potential to significantly harm minority shareholders.
Case Title:
SHAKTI BHATIA vs. UNION OF INDIA
DIARY NUMBER 45245/2025
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