The Indian government has objected to miner Vedanta’s planned split into four new companies, arguing that the demerger could hinder its ability to recover dues from the company, news channel CNBC-TV18 reported on Wednesday.
At a hearing conducted by the National Company Law Tribunal, the Indian government alleged that Vedanta modified the demerger scheme after securing a no objection certificate from the Securities and Exchange Board of India, CNBC said.
The NCLT is a quasi-judicial body that adjudicates matters related to companies.
Reuters could not immediately verify the court proceedings. Vedanta, in a statement, said that it had filed a detailed response to the government but did not share specifics.
The ministry of mining and petroleum and natural gas did not respond to a Reuters request for comment.
None of them have specified the amount being claimed.
Vedanta said it has informed the tribunal that it will issue a corporate guarantee for its unit in favour of the Ministry of Petroleum and Natural Gas about the recovery of the dues in question.
The oils-to-metals conglomerate had said in December that it would split into four new listed entities while remaining listed as a main company, scrapping an earlier plan to break up into six separate businesses.
The government, through its legal representative, has alleged concealment and non-disclosure of key information related to the demerger, CNBC-TV18 reported. It also said that there was concealment and non-disclosure of key details, “inflated revenues” and “concealed liabilities,” according to the report.
Vedanta had said earlier this month it received a warning letter from SEBI citing certain non-compliances but did not address government’s allegations in its statement.
The NCLT has deferred the next hearing to September 17, the news channel added.
Vedanta shares fell as much as 2.8% after the report, but trimmed some losses to close 1% lower at 445.50 rupees.
(Reporting by Sethuraman NR and Manvi Pant; Editing by Sonia Cheema and Nivedita Bhattacharjee)
