Govt flags Vedanta demerger risks, co says willing to give corporate guarantees: Report
Vedanta is seeking regulatory approval to split into four listed companies - Vedanta Aluminium Metal Ltd. for aluminium, Talwandi Sabo Power for power, Malco Energy Ltd. for oil and gas, and Vedanta Iron and Steel Ltd. for base metals.
- Sep 17, 2025,
- Updated Sep 17, 2025 8:55 PM IST
The Centre has flagged multiple concerns over Vedanta's proposed demerger at the National Company Law Tribunal (NCLT), CNBC-TV18 reported on Wednesday. During the hearing, objections were reportedly raised over financial risk, alleged misrepresentation of assets, insufficient disclosure of liabilities and violations of SEBI’s disclosure norms.
Vedanta is seeking regulatory approval to split into four listed companies - Vedanta Aluminium Metal Ltd. for aluminium, Talwandi Sabo Power for power, Malco Energy Ltd. for oil and gas, and Vedanta Iron and Steel Ltd. for base metals. The demerger plan was first unveiled in September 2023.
The government told the tribunal that the demerged entity of Malco Energy is likely to go into liquidation, making the recovery of government dues "virtually impossible." It argued that Vedanta's asset coverage would fall sharply if the demerger proceeds. The company has assets worth over Rs 2 lakh crore, which the government noted is 12.3 times higher than its demand of Rs 16,000 crore.
The government further highlighted its arbitral dispute with Vedanta, where claims of over Rs 5,900 crore have been raised. These claims, it alleged, were not disclosed by the company. It also said Malco has assets of only Rs 29,000 crore and a negative net worth as of March 2024.
The Centre accused Vedanta of misrepresenting sanctioned hydrocarbon blocks as assets and taking "massive loans" on them without the government's approval. They said the "rosy picture" presented by the company was misleading.
Vedanta countered that all creditors and stakeholders have already agreed to the demerger. The company told the tribunal it is ready to provide corporate guarantees to secure government dues. It also insisted that "there is no legal requirement for any further disclosure" and that the government “is not rejecting the scheme or is opposed to the demerger scheme.”
A Vedanta spokesperson told CNBC-TV18 that SEPCO has withdrawn its intervention application, while the Ministry of Petroleum and Natural Gas made its representation during the proceedings at NCLT. The spokesperson added that Vedanta’s legal counsel “provided the necessary clarifications in response” and confirmed that the scheme has been listed for final hearing on October 8, 2025.
The Centre has flagged multiple concerns over Vedanta's proposed demerger at the National Company Law Tribunal (NCLT), CNBC-TV18 reported on Wednesday. During the hearing, objections were reportedly raised over financial risk, alleged misrepresentation of assets, insufficient disclosure of liabilities and violations of SEBI’s disclosure norms.
Vedanta is seeking regulatory approval to split into four listed companies - Vedanta Aluminium Metal Ltd. for aluminium, Talwandi Sabo Power for power, Malco Energy Ltd. for oil and gas, and Vedanta Iron and Steel Ltd. for base metals. The demerger plan was first unveiled in September 2023.
The government told the tribunal that the demerged entity of Malco Energy is likely to go into liquidation, making the recovery of government dues "virtually impossible." It argued that Vedanta's asset coverage would fall sharply if the demerger proceeds. The company has assets worth over Rs 2 lakh crore, which the government noted is 12.3 times higher than its demand of Rs 16,000 crore.
The government further highlighted its arbitral dispute with Vedanta, where claims of over Rs 5,900 crore have been raised. These claims, it alleged, were not disclosed by the company. It also said Malco has assets of only Rs 29,000 crore and a negative net worth as of March 2024.
The Centre accused Vedanta of misrepresenting sanctioned hydrocarbon blocks as assets and taking "massive loans" on them without the government's approval. They said the "rosy picture" presented by the company was misleading.
Vedanta countered that all creditors and stakeholders have already agreed to the demerger. The company told the tribunal it is ready to provide corporate guarantees to secure government dues. It also insisted that "there is no legal requirement for any further disclosure" and that the government “is not rejecting the scheme or is opposed to the demerger scheme.”
A Vedanta spokesperson told CNBC-TV18 that SEPCO has withdrawn its intervention application, while the Ministry of Petroleum and Natural Gas made its representation during the proceedings at NCLT. The spokesperson added that Vedanta’s legal counsel “provided the necessary clarifications in response” and confirmed that the scheme has been listed for final hearing on October 8, 2025.