Latest news with #InGovern
Time of India
16-07-2025
- Business
- Time of India
Waiting for Sebi response to queries on Vedanta, says US-based short seller Viceroy Research
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Overweight rating Mumbai: US-based short seller Viceroy Research , which has lately published a series of reports on Vedanta Group , said it awaits a response from the Securities and Exchange Board of India Sebi ) to its queries on the metals conglomerate that has lender support for its ongoing reorganization by revenue streams."It is an opportunity for SEBI to really raise their game, how they handle this," London-based Fraser Perring , co-founder of Viceroy Research, told research firm has reached out to Sebi through email, assuring the regulator of assistance in assessing the veracity of its reports that criticized Vedanta and its proposed restructuring along business said Viceroy is yet to receive a response from the regulator."In all fairness, we only reached out to them a few days away, and I suspect they've got to get clarity," Perring has steadfastly denied all allegations, and pointed to broader regulatory and investor support for its corporate actions aimed at unlocking value embedded in the operating this week, proxy advisory firm InGovern said that foreign research firms not registered with the market regulator can publish reports on Indian companies without being subject to Indian regulatory scrutiny."Even when their actions directly impact Indian investors and markets," InGovern said, in reference to the oversight latitude enjoyed by such foreign have been instances where offshore firms have released critical reports on securities in which they hold economic interest, but did not respond to regulatory summons or cooperate with Indian authorities, InGovern its report on Wednesday, Viceroy Research has claimed that the Agarwal family, promoters of the Vedanta Group, are enjoying financing at a non-arms length from Vedanta Ltd, and its government-backed subsidiaries using parallel operating structures outside of the group, such as Serentica US-based short-seller, which has published its fifth report on the group since last week, said that Vedanta, Hindustan Zinc and BALCO 's investments in Serentica are "effectively worthless", given the way the deals have been Renewables is a green energy company owned 65% by global investment firm KKR, and the rest by Twin Star Overseas, which is owned by the Agarwal Hindustan Zinc and BALCO invested in Optionally Convertible Redeemable Preference Shares (OCRPS) issued by Serentica, which offer negligible returns (0.0001% dividend annually) and no control or upside for 30 years. The firm has described these investments as financially unviable and had published its first report on the Vedanta Group last Wednesday, terming Vedanta Resources a 'parasite' holding company, which was supported entirely by cash from its operating company firm then published questions that shareholders of Vedanta must ask the management at their annual general meeting, following it up with an analysis of the AGM, which they termed as a staged Viceroy's first report last week, shares and bonds of Vedanta have not seen a significant movement, except for a knee-jerk reaction on the day the report was released."I don't expect or encourage anyone to just react to noise. We would expect them to fact check," Perring said. "Unlike normal short sellers that publish one report and run away, we put out key themes where people can find it themselves if they want to do the said that the company had a golden opportunity to start being transparent."They have refused and as such we are going to make sure that people have the information to either make them accountable or ignore it and let the looting continue."In a report released earlier this week, BofA Securities has maintained its 'overweight' rating for three bonds of Vedanta Resources Plc, while downgrading two of its bonds to 'marketweight'. The brokerage said that the company has reduced its debt, has lower repayments over the next three years helped by its recent refinancings, and has seen a moderation in its interest cost."We are OW VEDLN 28s/ 29s/31s as bonds look cheap compared to peers. MW on 30s/33s as we see more value in 29s/31s with higher yields and lower duration," it said.
Time of India
15-07-2025
- Business
- Time of India
Vedanta shares in focus as Viceroy criticizes AGM, InGovern defends Group structure
Shares of Anil Agarwal-led Vedanta are expected to remain in focus on Tuesday following fresh criticism from US-based short-seller Viceroy Research regarding the company's annual general meeting (AGM), even as proxy advisory firm InGovern defended Vedanta's corporate structure. Viceroy Research criticised Vedanta's recently held AGM, calling it a 'stage-managed' event that, according to the firm, neither encouraged nor meaningfully addressed investor questions. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 나를 빛나게 해줄 예쁜 마음, 예쁜 팔찌 유니세프 지금 기부하기 Undo The short-seller highlighted that of the roughly 20 callers during the AGM, only three posed actual questions, while the rest reportedly delivered long speeches praising Vedanta chairman Anil Agarwal . Viceroy also noted that one caller who raised questions on topics such as brand fees, capex spending, and related-party transactions appeared to have been included only due to an apparent oversight. Viceroy had previously emphasized that London-based Vedanta Resources, the holding company of Vedanta Ltd, is entirely reliant on cash flows from its India-listed subsidiary, raising concerns about the group's financial structure. Live Events In response to the criticism, proxy advisory firm InGovern defended Vedanta's holding structure, stating that such frameworks are common in capital-intensive sectors such as infrastructure, natural resources, and utilities. InGovern cited companies like the Adani Group, Tata Group, and Reliance Industries , as well as global firms Glencore and Anglo American, as examples of similar structures. The firm noted that holding companies using cash flows from subsidiaries is both legitimate and standard practice in these industries. InGovern also issued a cautionary note regarding short-seller reports, stating that such reports often reflect the financial interests of their authors and may present negative interpretations of public data. The firm advised investors to view these reports as just one perspective among many, particularly since short-seller reports are known to trigger sharp volatility in stock prices. Furthermore, InGovern flagged regulatory inconsistencies, noting that while Sebi mandates registration for domestic entities and individuals publishing research on Indian securities, foreign firms like Viceroy can release reports on Indian companies without regulatory scrutiny. The firm cited instances where offshore research entities have published critical reports without responding to regulatory summons or cooperating with Indian authorities. Vedanta shares closed 1.3% higher at Rs 448.25 on BSE on Monday. Also read: Lack of short selling in Indian markets causing potential market distortions: Zerodha's Nithin Kamath ( Disclaimer : Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Time of India
14-07-2025
- Business
- Time of India
Viceroy slams AGM; InGovern defends Vedanta structure
Mumbai: US short-seller Viceroy Research has criticized Vedanta's annual general meeting, calling the exercise a 'stage-managed' event that neither encouraged questions from investors, nor meaningfully answered them. But proxy advisor InGovern , said a structure like Vedanta Group's, where holding companies use cash flows from subsidiaries, is both legitimate and common. Vedanta held its AGM last Thursday, a day after the US-based short seller said that London-based Vedanta Resources, its holding company, is entirely supported by cash from its India-listed subsidiary Vedanta. "This is a common structure, especially in capital-intensive industries such as infrastructure, natural resources, and utilities," InGovern said, citing India's Adani Group, Tata Group and Reliance Industries and global firms Glencore and Anglo American as examples. Given that reports by short-sellers are becoming significant market events, and are often followed by a high volatility in prices, InGovern said that it is important that stakeholders must view these reports in the right context. " Short-seller reports , such as the one published by Viceroy, often reflect the financial interests of authoring firms and may emphasize negative interpretations of public data," it said in a report on Monday, urging stakeholders to see these reports as one perspective among many. The advisory firm also pointed out that while the Securities and Exchange Board of India (SEBI) mandates domestic entities and individuals publishing on Indian securities to be registered with it, foreign research firms can publish on Indian companies without being subjected to the scrutiny of the regulator. "Instances have emerged where offshore research firms released critical reports while holding economic interests in the securities, yet did not respond to regulatory summons or cooperate with Indian authorities," it said. AGM Observations Viceroy said that the AGM consisted of extremely long speeches praising Anil Agarwal . "Of the ~20 callers, only 3 had actual questions. We are certain the inclusion of one of these was an oversight, as the caller "broke rank" with a question on VEDL's about brand fees, capex spending, and related party transactions," the research firm said in its report on Monday. This is the third report by Viceroy on the Vedanta group since Wednesday.
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Business Standard
14-07-2025
- Business
- Business Standard
InGovern Research calls for regulatory safeguards against short sellers
Governance firm InGovern Research has called for investor safeguards, citing market volatility triggered by offshore short-seller reports. This follows Viceroy Research's July 9 report alleging governance issues at Vedanta, which caused an intraday stock plunge of nearly 8 per cent. While acknowledging short-selling as a legitimate, regulated activity that aids market liquidity and price discovery, InGovern has emphasised that such reports often serve the financial interests of their authors. Critical research reports by short-sellers with negative interpretation of public data may lead to market reactions bordering on panic, which may benefit the short-seller financially from subsequent movements in stock or bond prices, the report noted. InGovern highlighted a significant regulatory gap — foreign entities like Viceroy, which are not registered with the Securities and Exchange Board of India (Sebi), can publish reports impacting Indian markets without facing domestic scrutiny. 'Foreign research outfits not registered with Sebi can publish reports on Indian companies without being subject to Indian regulatory scrutiny — even when their actions directly impact Indian investors and markets,' stated InGovern, referencing similar past incidents like Hindenburg Research's report that prompted regulatory reforms. Sebi mandates registration for research analysts covering Indian securities, ensuring accountability and oversight. However, this applies only to domestic entities. On Vedanta, InGovern advised contextual analysis of short-seller claims, noting that debt servicing through subsidiaries is common globally if transparently managed. The firm also observed increased investor scrutiny of Vedanta's related-party transactions and capital allocation in recent shareholder meetings. Meanwhile, industry voices, including Zerodha founder Nithin Kamath, underscored India's structural lack of short-selling mechanisms. 'Unless we make shorting of stocks easy in the Indian markets, price discovery will be impaired. India has been a structurally long-only market, with almost no shorting activity, because borrowing stock to short is really hard and is an offline process,' Kamath wrote on his social media handles, highlighting the lack of short-selling talent.
Time of India
14-07-2025
- Business
- Time of India
Foreign short-sellers trigger stock crashes in India with critical reports, and profit from them, reveals report
Proxy firm InGovern has released a report outlining the modus operandi of certain foreign short-sellers who start taking positions in target companies and make gains from the fall in their stock price once the report is released. "Foreign research outfits not registered with Sebi can publish reports on Indian companies without being subject to Indian regulatory scrutiny -- even when their actions directly impact Indian investors and markets," it said. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Bank Owned Properties For Sale In Duong Detham (Prices May Surprise You) Foreclosed Homes | Search ads Search Now Undo The report came in the backdrop of US-based Viceroy Research calling billionaire Anil Agarwal-led British firm Vedanta Resources a "parasite" that is "systematically draining" its Indian unit, an allegation which the group called "selective misinformation and baseless" aimed at discrediting it. InGovern said short seller reports have become significant market events, often resulting in heightened volatility and intense scrutiny of targeted companies. These firms first establish a short position in the securities of a company, which is followed by publishing a critical or adverse research report. The report often triggers market reactions, sometimes bordering on panic. Short sellers benefit financially from subsequent movements in stock or bond prices. Live Events In India, the Securities and Exchange Board of India (Sebi) has established a regulatory framework for research analysts. Entities and individuals who publish research on Indian securities are required to be registered with the regulator, ensuring a degree of accountability and oversight regarding the quality and intent of published research. "These regulations are designed to protect investor interests and promote market integrity by holding registered analysts to professional and ethical standards," InGovern said. Citing recent reports against Indian groups, it said instances have emerged where offshore research firms released critical reports while holding economic interests in the securities, yet did not respond to regulatory summons or cooperate with Indian authorities. The reference was to another US short seller, Hindenburg Research, which in January 2023 released a damning report against the Adani Group. Hindenburg, which has since shut shop, did not respond to summons issued by Sebi. "Indian regulators can enforce compliance and accountability among domestic research analysts, but have limited recourse against unregulated foreign entities. This creates a regulatory gap, allowing such firms to influence Indian markets without adhering to the same standards of transparency," InGovern said. "The accuracy of these reports is often debated, but the incentive structure -- where financial gains are tied to negative market outcomes-- raises concerns about motives, with market disruption sometimes prioritised over balanced analysis." Calling for a need for stronger safeguards, it said these dynamics highlight the importance of ongoing dialogue around disclosure norms, cross-border regulatory cooperation, and enhanced investor education as global capital markets become increasingly interconnected. InGovern has said that as an independent proxy advisory firm, it has made recommendations in the past for supporting and opposing various resolutions at Vedanta Group companies, depending on the nature of the proposal and the prevailing governance standards. "Routine resolutions such as adoption of financial statements or reappointment of auditors have generally received support when disclosures and processes met regulatory and best-practice standards," it said. On the proposed demerger of Vedanta, InGovern has noted that it was supported by leading proxy advisory firms (including InGovern) all of whom recommended a vote in favour of the demerger. "These advisors cited potential benefits such as enhanced management focus, improved capital market access, and the opportunity for investors to hold shares in businesses with distinct investment profiles. The demerger is designed to unlock value, sharper strategic focus for each business, and provide flexibility for future growth and collaboration with investors and partners, including the possibility of sale of any of the demerged entities," InGovern said. On the Viceroy report's observations on entity structures, InGovern has stated that such structures are quite common and legitimate. "Infrastructure, mining, and energy businesses require large upfront investments and often operate through holding company structures for regulatory, tax, and operational reasons," it said, adding that parent companies often raise debt at the group level (sometimes at more favourable rates) and use subsidiary cash flows for servicing, which is disclosed and regulated. "This model is not unique to India -- most large conglomerates globally use similar structures, as seen with Glencore, Anglo American, and BHP," it said. InGovern has also highlighted how various regulatory norms in India require ample disclosures for companies, which helps provide information to stakeholders. "Indian regulations (SEBI, Companies Act) require comprehensive disclosure of related-party transactions, inter-corporate loans, and dividend flows." Vedanta Group had denied the claims in the Viceroy Report, stating that the report is a malicious combination of selective misinformation and baseless allegations to discredit the Group.
