Vedanta’s parent refunded part of brand fee amid ED scrutiny, says short-seller Viceroy
Mumbai: Vedanta LTD’s London -based parent Vedanta Resources returned a portion of the brand fee paid by the subsidiary in India, which investigates the company’s brand fee payments at that time, investigating US -based short vendor Viceroy research.
Vedanta Resources were returned LaIn 2023, the short seller claimed a short vendor to Vedanta Ltd ($ 123 million), a short vendor. The transaction can be seen in the company’s FY24 year report.
The short seller did not clarify which legal provisions were violated by Vedanta. However, the ED investigation was still continuing, referring to the anonymous former employees, consultants and other parts of the farewell group, the farewell group. “Stakeholders should not confuse the lack of analysis of public updates, the risk is unresolved, ongoing and material.”
In a response sent by e-mail, a goodbye spokesman said, “The short sellers in question wandered the property seedlings and misleading ‘reports and misleading’ reports.
For FY24, due to macroeconomic winds, the real turnover did not meet the business plan. In line with cautious financial practices, Vedanta Proactive asked VRL to return the amount of brand fees in advance instead of the routine set cycle. In addition, any conceptual opportunity cost was equally handled by VRL with a discount that was expanded with the next brand fee. ”
‘Routine request’
Regarding the ED notification during the quarter FY24, the spokesman said, “This was a routine demand. The subject did not require to be disclosed in accordance with valid regulations and all necessary information was given in accordance with the necessary. There is no extraordinary queries on this issue.”
This is the last of Viceroy’s series of claims for Vedanta Group. The short seller accused London -based parent of spending money with high dividends and brand fee payments from Vedanta Ltd.– In addition to other things. Vedanta Group rejected all the allegations.
Previously, Dy Chandrachud, the former Chief Justice of India, gave Vedanta a legal idea of a professional capacity in Viceroy reports. He said that the first and largest Viceroy report about Vedanta did not have reliability and that the researchers behind the report were “suspicious identity information”. As a result of Viceroy’s short seller reports, Vedanta Resources emphasized his interest in highlighting a possible route in his commercial articles. He also said that the Vedanta Ltd on the Indian list was suspected of the timing of the report, as directed to a debit.
Viceroy then objected to the legal opinion of the former head of justice, and said that he did not answer any questions about dividend payments and mining and minerals about financial bad management claims.
Vedanta LTD shares fell 4.7% since Viceroy’s first report on the farewell group on July 8th.
Vedanta’s unique brand fee structure
Vedanta LTD and subsidiaries pay 0.75% to 3% of their revenues as brand and strategic services fee for farewell resources according to their provision of farewell resources. The fee is paid at the beginning of a fiscal year by estimating income throughout the year. Any excess wage paid at the end of the year is refunded.
The short seller called this regulation from Vedanta LTD to Vedanta Resources as a credit facility rolling with “zero interest, zero collateral and zero transparency”.
Although the building was unique compared to multinational companies and holdings where brand fees are paid at the end of the year, Viceroy claimed abnormality. When the short seller faced a liquidity crisis, Vedanta Resources triggered temporary transfer from Vedanta LTD as brand fees. The short seller said these temporary payments were initially attracted ED’s attention.
In FY25, group companies paid a consolidated brand fee of 361 million dollars to Vedanta Resources– According to Viceroy’s calculation. The number was $ 339 million in the previous year. In total, group companies paid a brand fee of $ 1.2 billion between 22 and FY25, equivalent to 12% of Vedanta LTD’s total net profit during this period.
For FY26, Vedanta Ltd received a brand fee of $ 400 million in Vedanta Resources in April, according to Viceroy. The company has not yet announced this figure in its financial statements. Vedanta Ltd listed in India will announce its April-June quarter earnings on Thursday.
Brand fees are a basic flow of income for Vedanta Resources, which do not have business enterprises and based on income from subsidiaries. Fees, London -based company’s interest payments of $ 835 million annually helps to serve a net debt of $ 4.9 billion.
Viceroy said that the brand wage structure is a concern for Vedanta Resources’s open marine lenders. “It was clear that there was no legal or commercial justification for brand fees and they were very vulnerable to regulatory intervention.”
