ED raids Vedanta offices in Delhi, Mumbai over alleged FEMA violations
Multi-city searches reportedly target cross-border royalty payments made by mining giant to parent company; group faced lens on foreign exchange matters earlier
The Enforcement Directorate (ED) conducted searches at multiple corporate offices of the Anil Agarwal-led Vedanta Group on Tuesday (June 2), according to officials.
The operation involved premises in Delhi and Mumbai as part of an active investigation into alleged violations under the Foreign Exchange Management Act (FEMA).
According to CNBCTV18, these search operations are being carried out with regard to the royalty payment made by Vedanta Ltd. to its parent company Vedanta Resources.
More details are yet to be ascertained, even as the searches are on. An official statement from the company is awaited.
Not the first time
The mining conglomerate is no stranger to central regulatory scrutiny regarding cross-border capital flows.
Also read: Vedanta's Anil Agarwal renews pledge to donate 75% wealth after son Agnivesh’s death
In 2004, ED had penalised Sterlite Industries, the predecessor company that was later restructured into the modern Vedanta Group, along with three of its promoter directors. The agency found them guilty of violating both the Foreign Exchange Regulation Act (FERA) and the FEMA, resulting in heavy financial penalties.
The shares of Vedanta Ltd remain largely unaffected so far. The stock has been in the spotlight through the month of May after it began trading adjusted for the demerger of its aluminium, oil & gas, power, and iron & steel businesses.
Credit rating
Natural resources giant Vedanta Group announced on Friday that it has achieved its highest domestic credit rating in over 10 years following an upgrade by domestic rating agency ICRA.
The agency raised the long-term ratings of Vedanta's core group entities to 'AA+'.
Also read: Vedanta power plant blast in Chhattisgarh: Death toll rises to 16
Instruments with an AA+ rating signify a very high degree of financial safety regarding the timely servicing of debt obligations, carrying minimal credit risk.
As one of India's largest conglomerates, Vedanta’s operations span critical sectors including zinc, silver, aluminium, iron ore, steel, copper, and oil and gas. The group’s major assets include Cairn Oil and Gas and Hindustan Zinc Limited, in which the Indian government continues to hold a residual stake.