Vedanta draws flak for delisting from LSE

Move limits company’s public scrutiny

October 01, 2018 10:14 pm | Updated 10:33 pm IST - London

Protests took place outside London’s financial market regulator, the Financial Conduct Authority, and Vedanta Resources’ AGM, as campaigners decried what they described as “regulatory failure’ that had enabled the company to first list in London in 2003 and then delist on Monday, which it said was being carried out as “part of a policy to further limit public scrutiny of its operations.”

A group of about 50 protestors shouted ‘Vedanta out of London out, out, out’ and ‘Anil Agarwal blood on your hands.’ Last week, the campaign group ‘Foil Vedanta’, which brings together activists in the U.K. alongside local campaigners in India and Zambia, published a detailed report describing legal judgments and evidence of “key violations’ across India, Zambia and beyond.

A copy of the report was handed to an FCA representative on Monday.

“Our report and today’s protests send a clear message that London listing authorities must take serious note of regulatory failures that have been recurring with a disproportionate number of controversial mining companies like Vedanta,” said Samarendra Das of Foil Vedanta, the author of the report. “Instead of taking action following the Tuticorin massacre, they are allowing them to jump ship and run away from London to avoid further scrutiny.”

Impact on litigation

“We are aware that Vedanta’s LSE delisting takes effect from today. We are not aware of any impact that the delisting will have on the litigation in which we represent over 1,800 Zambian villagers in their claims against Vedanta and its subsidiary KCM for losses they say they have suffered as a result pollution from the Nchanga copper mine,” said Oliver Holland, a solicitor at Leigh Day, which is representing the villagers. “As far as we and our clients are concerned the case is continuing and the next hearing on jurisdiction is listed to be heard by the Supreme Court on 15 and ‪16 January 2019‬.”

As expected, Vedanta Resources announced on Monday that the listing of Vedanta shares on the official list of the U.K. Listings Authority, and trading of all company shares on the London Stock Exchange’s main market had been cancelled with effect from 8 am on Monday.

In September, Volcan Investment Ltd, the holding company wholly owned by Mr. Agarwal’s discretionary trust said its cash offer for the shares it didn’t already own had become unconditional after minority investors agreed to sell their share. In July it announced a plan to acquire the remaining 33.47% of Vedanta Resources, valuing the company at £2.325 billion ($3.03 billion). The all-cash offer of £8.25 a share marked a 28% premium on the closing price of Vedanta Resources before the offer was announced. Mr. Agarwal described the move to take the company private as a “natural progression” and that while a London-listing had served the company “extremely well” since 2003, it was no longer necessary for the company to achieve its strategic objectives. In recent months, criticism of Vedanta Resources has grown following the killing of protestors in police firing in Thoothukudi in May. The opposition Labour Party called for Vedanta Resources to be delisted from the LSE to “remove its cloak of respectability.”

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