Supreme Court Refuses To Entertain PIL Seeking Probe Into US Based Short Seller Viceroy's Allegations Against Vedanta Group

The Supreme Court on Friday refused to entertain a public interest litigation (PIL) seeking a probe into allegations made by US-based short-seller Viceroy Research LLC against Vedanta Limited, Hindustan Zinc Limited, Vedanta Resources Limited and related entities.

A bench of Justice PS Narasimha and Justice AS Chandurkar allowed the petitioner, one Shakti Bhatia, to withdraw the petition after expressing that it was not inclined to entertain the matter.

In the petition, Bhatia had sought a thorough investigation by SEBI, RBI and the Ministry of Corporate Affairs into the affairs of Vedanta Limited, Hindustan Zinc Limited and Vedanta Resources Limited along with their sister concerns.

The petition referred to a research report published on July 9, 2025, by Delaware-based investigative firm and short-seller Viceroy Research LLC, alleging fraud, financial manipulations, price rigging and regulatory violations by the Vedanta Group.

Senior Advocate Gopal Sankaranarayanan for the petitioner submitted that the relief sought was limited to a direction to the Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI) to act on complaints already lodged with them and to carry out their statutory duties of inquiry and investigation. “It causes a concern so that's why SEBI and RBI as regulatory agencies should respond…Let them file a report giving a clean chit, that's what they should do”, he said.

Solicitor General Tushar Mehta opposed the plea and said the PIL was not bona fide. He argued that the petition appeared to have been orchestrated by the foreign short-seller itself. “There is a systemic pattern where outside agencies write reports and influence the Indian stock market”, he said.

After hearing the parties, the bench declined to entertain the petition. The petitioner then withdrew the PIL.

The petition stated that Viceroy had filed complaints before SEBI and RBI and that despite such representations, no response had been forthcoming.

The petition relied on the Viceroy report alleging financial irregularities within the Vedanta Group, including a debt crisis at Vedanta Resources. The petition highlighted the following allegations in the report –

• Vedanta Resources and its holding companies had no operating assets but held gross interest-bearing liabilities of USD 4.9 billion as of FY 2025. It claimed that Vedanta Resources was entirely dependent on dividends from Vedanta Limited, Hindustan Zinc, and BALCO to service its debts and that Vedanta Limited had declared disproportionately large dividends for this purpose, causing depletion of its cash reserves.
• Vedanta Limited had advanced loans of about USD 956 million (₹8,129 crore) to Vedanta Resources and its subsidiaries, which were used to purchase Vedanta Limited's own shares from the open market, increasing the promoter's stake from 50% to 69%. It said this arrangement, where Vedanta Limited acted as both lender and guarantor, violated SEBI's unfair trade practice guidelines.
• Vedanta Limited and its subsidiaries had entered into several related party transactions without proper disclosure or approvals from their boards or shareholders. It also referred to undisclosed statutory dues of Hindustan Zinc Limited and alleged lapses in corporate governance.

The petition contended that SEBI had a statutory obligation under Section 11(2A) of the SEBI Act to undertake inspection and inquiry into any listed company if there was reasonable belief of unfair trade practices. The petition said the silence of SEBI and other regulators on grave public allegations against companies involving public and government money had prompted the filing of the PIL.

Case no. – W.P.(C) No. 832/2025

Case Title – Shakti Bhatia v. Union Of India 

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