The Enforcement Directorate (ED) on Tuesday carried out search operations at offices of Vedanta in Mumbai and Delhi.
According to CNBC TV18, the searches are linked to royalty payments made by Vedanta to its parent company. Officials later confirmed that the action is being conducted under the provisions of the Foreign Exchange Management Act (FEMA).
The development comes as regulatory agencies examine transactions involving overseas payments and compliance with foreign exchange regulations.
Vedanta Confirms Cooperation
Vedanta acknowledged the ongoing search operations and said it is fully cooperating with the authorities.
In a statement to CNBC TV18, the company said it is providing all information sought by officials and remains committed to complying with all applicable laws and regulations.
"We are extending full cooperation to the authorities and are providing all information sought. Company remains committed to compliance with all applicable laws & regulations. As the matter is currently under regulatory process, we are unable to comment further at this stage."
Probe Comes Amid Demerger Plans
The searches come weeks after Vedanta Group Chairman Anil Agarwal announced that all four demerged Vedanta businesses would be listed independently within a month.
The planned restructuring is one of the largest corporate reorganisations undertaken by the group and is aimed at unlocking value across its diverse businesses.
Under the proposed demerger, Vedanta’s aluminium business will become an independent listed company. The unit currently produces 3 million tonnes annually and aims to double capacity to 6 million tonnes within three years.
The second company will house the oil and gas business. Vedanta plans to invest $5 billion over the next three to five years to increase production to 500,000 barrels per day.
The third entity will comprise the power business, which currently generates 4,000 MW and has a target of expanding capacity to 20,000 MW through brownfield projects.
The fourth company will focus on iron and steel operations. The business currently produces 4 million tonnes of steel and aims to expand production capacity to 15 million tonnes.
Regulatory Spotlight On Vedanta
The ED action places Vedanta under regulatory scrutiny at a crucial time when the group is preparing for a major restructuring and multiple listings.
While the company has reiterated its commitment to compliance, the outcome of the FEMA-related investigation could be closely watched by investors and market participants.
