MUMBAI: Vedanta Semiconductors is a ‘sham’ commodities trading operation designed to improperly avoid classification as a non-banking financial company, Viceroy Research said in a report on Friday. Vedanta Semiconductors is a subsidiary of the Vedanta Group.
The US-based short seller has been publishing a series of reports on the group for the last few days, with its first report alleging that Vedanta Resources, the holding company of Vedanta, is propped by cash entirely from its operating unit. Vedanta has denied all allegations so far, calling them ‘baseless’.
“This scheme was devised to facilitate VEDL’s remittance of brand fees to Vedanta Resource’s (VRL) in April 2025, when it faced a severe liquidity crisis,” the firm said in its report on Friday.
“Vedanta strongly rejects the baseless allegations made in the report regarding Vedanta Semiconductors Pvt. Ltd. (VSPL),” a spokesperson for Vedanta said.
Vedanta has reactivated Vedanta Semiconductors not as a semiconductor venture, but as a zero-margin trading entity whose operations appear to consist entirely of paper-based commodity trading, Viceroy said.
After tapping offshore lenders for a short-term, Vedanta Semiconductors began trading commodities on a zero-margin basis, the firm said. It has then remitted these loans to Vedanta as a 24-month loan. Vedanta Semiconductors, superficially an operating entity, would face reduced scrutiny for loan repayments under FEMA, Companies Act, PMLA and AML frameworks, it said.
“Loans between VSPL and Vedanta Limited were executed in full compliance with applicable laws, corporate governance standards, and both Vedanta Limited and VSPL have consistently reported accurate loan terms, interest rates, and collateral in line with statutory norms,” the spokesperson for Vedanta said.
“VSPL will likely have to continue these sham operations until FY27, when the loans fall due and repayment will have to be routed back through it,” Viceroy said. “If at any point the regulators intervene at VSPL, the lender group is likely facing a total wipeout,” it said.
The US-based short seller has been publishing a series of reports on the group for the last few days, with its first report alleging that Vedanta Resources, the holding company of Vedanta, is propped by cash entirely from its operating unit. Vedanta has denied all allegations so far, calling them ‘baseless’.
“This scheme was devised to facilitate VEDL’s remittance of brand fees to Vedanta Resource’s (VRL) in April 2025, when it faced a severe liquidity crisis,” the firm said in its report on Friday.
“Vedanta strongly rejects the baseless allegations made in the report regarding Vedanta Semiconductors Pvt. Ltd. (VSPL),” a spokesperson for Vedanta said.
Vedanta has reactivated Vedanta Semiconductors not as a semiconductor venture, but as a zero-margin trading entity whose operations appear to consist entirely of paper-based commodity trading, Viceroy said.
After tapping offshore lenders for a short-term, Vedanta Semiconductors began trading commodities on a zero-margin basis, the firm said. It has then remitted these loans to Vedanta as a 24-month loan. Vedanta Semiconductors, superficially an operating entity, would face reduced scrutiny for loan repayments under FEMA, Companies Act, PMLA and AML frameworks, it said.
“Loans between VSPL and Vedanta Limited were executed in full compliance with applicable laws, corporate governance standards, and both Vedanta Limited and VSPL have consistently reported accurate loan terms, interest rates, and collateral in line with statutory norms,” the spokesperson for Vedanta said.
“VSPL will likely have to continue these sham operations until FY27, when the loans fall due and repayment will have to be routed back through it,” Viceroy said. “If at any point the regulators intervene at VSPL, the lender group is likely facing a total wipeout,” it said.
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