SEBI Fines Vedanta Rs. 30 Lakh for Violating Listing & Disclosure Norms

SEBI Fines Vedanta Rs. 30 Lakh for Violating Listing & Disclosure Norms

The Securities and Exchange Board of India (SEBI) has imposed a penalty of Rs. 30 lakhs on the metals-to-oil conglomerate Vedanta Ltd for violating the market regulator's disclosure requirements.

According to SEBI Vedanta had broken its rules by publishing a press release on its website that made it appear it had partnered with Foxconn to make semiconductors in India, when the deal was with Vedanta's holding company.

In March 2023, the SEBI had issued a show cause notice to Vedanta Ltd. The matter pertained to announcements related to the semiconductor business, including the company's holding company Volcan Investments Ltd (VIL) partnering with Foxconn to make semiconductors in the country.

Initially, a release in February 2022 said that Vedanta Ltd has partnered with Foxconn and upon the stock exchanges seeking clarification, the company said the deal was to be undertaken by VIL.

In September 2022, Vedanta Ltd issued a release, which was also available on its website, saying that it has signed MoUs to set up semiconductors and display fab units.

As the release was found to be contradictory to the company's clarification given in February, the stock exchange NSE asked it to clarify. Thereafter, the company informed the business of manufacturing semiconductors is not under it and would be undertaken by VIL, noted the SEBI.

SEBI said that while Vedanta Ltd removed the ‘offending press release’ after the hearing in the matter, it still remains a question as to how the company continued to carry the press release on its website.

SEBI’s Adjudicating Officer Barnali Mukherjee stated in its order that, “the efforts taken by the company to take corrective actions were wanting and the actions were far delayed.”

Conceptually, SEBI stated the events pertaining to the listed company only should be carried on the website. However, in the present case the events of the promoter, not related to the listed company had been carried on the website.

“Vedanta, being a multi-billion-dollar company with business across jurisdiction and Vedanta Resources Ltd (VRL) with a presence among so many companies with listed companies across the globe, it is unfathomable as to how an event pertaining to the ultimate holding company, i.e., Volcan Investments Limited (VIL) found its way to the website of Vedanta Ltd, the listed company in India,” the order said.

Furthermore, the market regulator inferred from the chronology, that the event of VIL was known long back in February 2022 and that exchanges had sought clarifications from the noticee (Vedanta) about the relevance of the news to the noticee itself.

The SEBI concluded by dictating, “Having had this knowledge as well as being fully aware of the fact that the event was in no way related to the noticee, i.e., listed company, the noticee egregiously hosted the press release on its website. Not only this, it made the press release on its letterhead itself giving a clear indication that the news pertained to the listed entity.”

Accordingly, SEBI imposed a penalty of Rs 30,00,000 on Vedanta Ltd for violation of listing and disclosure norms. Vedanta was ordered make the payment within 45 days of receipts of the order.