New Delhi: Markets regulator SEBI on Friday imposed a fine of Rs 30 lakh on Vedanta Ltd for failing to provide correct disclosures, including on its website, in relation to certain announcements made by the company last year.
In a 24-page order, SEBI said the act of Vedanta Limited (noticee) to carry news not pertaining to its operations on the website leads to providing misleading information to the investors of the public limited company.
"All these events may lead one to cast aspersions on the intent of the company to host the press release on its website," the regulator said as it imposed a fine of Rs 30 lakh on the company for certain violations of norms.
The fine has been slapped for the failure to provide correct disclosures, including misrepresentation on the company's website.
In March this year, the Securities and Exchange Board of India (SEBI) 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, stock exchange NSE asked it to clarify. Then, the company informed the business of manufacturing semiconductors is not under it and would be undertaken by VIL, as per the regulator.
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.
"The efforts taken by the company to take corrective actions were wanting and the actions were far delayed," SEBI Adjudicating Officer Barnali Mukherjee said in the order.
Conceptually, SEBI said the events pertaining to the listed company only should be carried on the website. However, here is a case where the events of the promoter, not related to the listed company have been carried on the website, it added.
"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.
SEBI also noted that it is clear from the chronology, that the event of VIL was known long back in February 2022 and that exchanges had sought clarifications from the noticee about the relevance of the news to the noticee itself.
"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," it said.