The Anil Agarwal-led Vedanta’s demerger process again ran into hurdles at the National Company Law Tribunal (NCLT) on Wednesday, with the ministry of petroleum and natural gas objecting to the plan in its current form alleging that the company had misrepresented hydrocarbon assets and failed to fully disclose loans of about Rs 3,200 crore raised against them.
The ministry also warned that the restructuring could create financial risks for the sector if pushed through in its current form.
The ministry’s counsel told the tribunal that Vedanta had shown exploration blocks, including those under the RJ Block production-sharing contract, as assets to secure loans without securing mandatory approvals. More critically, it alleged, the company had not provided the firm’s stakeholders with a full breakdown of the loans.
Ministry seeks transparency of the demerger plan
“Rs 3,200 crore — how much loan from which asset, and from which bank. (The company) is supposed to give all those details to come out fair for all the stakeholders,” the ministry’s lawyer said. The ministry asked the tribunal to insist on clear, itemised disclosures while clarifying it was not opposing the demerger itself but only the opaque manner in which the scheme had been presented.
A Vedanta spokesperson said its counsel provided the necessary clarifications in response to the ministry’s submissions. The matter has been listed for final hearing on October 8, 2025.
Vedanta’s legal team argued that the company had already met all disclosure obligations under the Companies Act. Only material facts such as audited accounts, auditor reports and ongoing investigations needed to be shared with the tribunal, it said, adding that contractual claims did not qualify. The company also stressed that all shareholders and creditors had given their approval to the restructuring.
Vedanta on corporate guarantee
To allay fears of financial risk, Vedanta highlighted that it had gone beyond legal requirements by offering a corporate guarantee. Its counsel said Malco Energy — one of the entities in the scheme — would see its net worth improve from a negative Rs 184 crore to a positive Rs 1,700 crore after the demerger. Combined with the corporate guarantee, the company claimed creditors had cover of more than seven times their claims.
The day’s proceedings also confirmed the withdrawal of intervention by Sepco Electric Power Construction Corporation, a former contractor for Talwandi Sabo Power. The withdrawal hearing will be conducted on September 24.
Sepco had earlier objected to the demerger, claiming the company hid liabilities of about Rs 1,251 crore from EPC (engineering, procurement, and construction) disputes. The NCLT initially upheld Sepco’s objection and blocked the demerger scheme. Vedanta subsequently appealed in the National Company Law Appellate Tribunal (NCLAT), and during the appeal proceedings the two sides reached a settlement.
Sepco agreed it had no further claims, gave its consent to the restructuring, and promised not to challenge it again. Based on this, the NCLAT earlier this week set aside the earlier NCLT order blocking the dermerger.
Vedanta’s stock plunged 3.8% to the day’s low of Rs 443.9 per share before recovering to Rs 456.05 by the end of day’s trading, down 1.15% compared to Tuesday’s closing price.