SC Judge Recuses From Hearing Plea Seeking Probe Into US Short Seller's Allegations Against Vedanta

New Delhi: Supreme Court judge Justice K Vinod Chandran on Monday opted out of hearing a plea for authorities to investigate allegations made by US short seller Viceroy Research that billionaire Anil Agarwal's mining conglomerate was "financially unsustainable" and posing a severe risk to creditors.

The matter came up for hearing before a bench led by Chief Justice of India B R Gavai and comprising justices K Vinod Chandran and Atul Chandurkar. Taking note of Justice Chandran's recusal, the bench led by CJI adjourned the plea filed by advocate Shakti Bhatia.

Viceroy Research had released a report charging billionaire Agarwal's mining conglomerate as "financially unsustainable". The report claimed that it posed a severe risk to creditors. The group has termed these allegations "selective misinformation and baseless", aimed at discrediting it.

The plea, filed by the advocate, contended that the petitioner has independently corroborated portions of the Viceroy report, particularly regarding undisclosed related-party transactions, by reviewing MCA21 filings, SEBI disclosures and Registrar of Companies records.

The petition submitted that certain high-value transactions involved counterparties neither declared as related parties nor subjected to shareholder approval as mandated.

Viceroy had said it was shorting the debt stack of Vedanta Resources, the parent company and majority owner of Mumbai-listed Vedanta Ltd, as it released the 85-page report.

Shorting debt, also known as short selling of bonds, is a trading strategy where an investor looks to profit from a decline in the price of bonds or other debt instruments.

It involves borrowing the bond, selling it at the current market price, and then buying it back later at a potentially lower price to return to the lender, pocketing the difference as profit.

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