'Viceroy report against Vedanta lacks credibility', former Chief Justice comments

The US-based Viceroy Research report includes serious allegations against the Vedanta Group, which have harmed the group's business and reputation. However, this report lacks credibility. Former Chief Justice of India DY Chandrachud stated this in his legal opinion.

The company said in a regulatory filing on Friday that Justice Chandrachud's remarks came after Vedanta sought an independent legal opinion from the former Chief Justice regarding the allegations made in the Viceroy Research report. 

According to the filing, the former chief justice said that "Viceroy has a track record of publishing misleading reports to take short positions in listed companies and then illegally profit from the resulting market effect." 

"The elements required to prove defamation in this case—both civil and criminal—are sufficient. Viceroy has published, in public, reputation-damaging statements that directly target Vedanta," the former chief justice said. 

Viceroy, in its July 9 report, accused Vedanta's London-based parent Vedanta Resources of systematically destroying the India-listed company. The report, based on publicly available information, said the group's entire structure was "financially unsustainable," operationally weak, posed serious risks to creditors, and "resembled a Ponzi scheme." 

Vedanta, however, rejected the report. Chandrachud said, "The report contains serious allegations like "Ponzi scheme" and "parasite" which have harmed Vedanta's business and reputation. Under these circumstances, it would be appropriate for Vedanta to resort to legal remedies." 

The former Chief Justice, who made the final ruling on the Adani-Hindenburg case, further said that the Viceroy's report lacks credibility as it has a track record of publishing misleading reports to take short positions in listed companies and then make illegal profits when the share price falls.