Supreme Court judge Justice K Vinod Chandran on Monday recused himself from hearing a petition seeking a probe into allegations by US-based short seller Viceroy Research that billionaire Anil Agarwal’s mining conglomerate is “financially unsustainable” and poses a severe risk to creditors.
The matter came up before a bench comprising Chief Justice of India B R Gavai, Justice K Vinod Chandran, and Justice Atul Chandurkar. Following Justice Chandran’s recusal, the bench adjourned the plea filed by advocate Shakti Bhatia.
Allegations and Petitioner’s Claims
Advocate Bhatia, in his petition, said he had independently verified parts of Viceroy’s report, especially findings on undisclosed related-party transactions. He claimed to have relied on data from the MCA21 corporate filings portal, SEBI disclosures, and Registrar of Companies records.
According to the plea, some high-value transactions involved counterparties that were neither disclosed as related parties nor subjected to mandatory shareholder approval.
Viceroy Research, in its 85-page report, alleged that Vedanta Resources Ltd (VRL) — the London-based parent of Mumbai-listed Vedanta Ltd — is “heavily indebted” and that “the entire group structure is financially unsustainable, operationally compromised, and poses a severe, under-appreciated risk to creditors.”
The short seller also disclosed that it was betting against Vedanta Resources’ debt, a practice known as shorting bonds, in which an investor profits if the bond prices fall.
Company’s Response
Vedanta Resources dismissed the allegations as “selective misinformation and baseless,” asserting that the report was aimed at discrediting the group. The company maintained that it remained committed to its creditors and financial obligations.
The matter is expected to be listed before a new bench following Justice Chandran’s withdrawal from the case.
