Vedanta Shares Slip Nearly 3% Amid Reports of ED Searches

Shares of metal and mining sector major Vedanta slipped nearly 3 per cent to a low of Rs 328.2 apiece on the NSE. The stock declined after reports claimed that the Enforcement Directorate (ED) conducted search operations at some of the company’s offices.

ED Probe On Vedanta

According to a report by news agency Press Trust of India (PTI), officials have confirmed that the searches began on June 1 and have extended onto June 2. The search operations have been carried out at the company’s premises located in New Delhi and Rajasthan. The investigation is reportedly being handled under the civil provisions of the Foreign Exchange Management Act (FEMA), which deal with suspected irregularities in cross-border and foreign currency transactions.

According to a report by CNBC, ED is looking into cross-border financial outflows made by the domestic listed entity, Vedanta, to its London-based parent company, Vedanta Resources, to ensure that the cross-border brand usage payments complied with existing foreign exchange regulations.

The news is likely to have triggered a wave of sell-offs by investors, temporarily wiping out a significant chunk of the company's market value.

Responding to the evolving market situation, a Vedanta spokesperson issued a statement confirming the ongoing regulatory process while reassuring investors of the company's compliance stance.

"We are extending full cooperation to the authorities and are providing all information sought. The company remains committed to compliance with all applicable laws and regulations. As the matter is currently under regulatory process, we are unable to comment further at this stage," the Vedanta spokesperson said.

Apart from the recent reports of ED searches, Vedanta shares had already dropped over 4 per cent on June 1 on account of weak industrial manufacturing data from China, which dragged down global base metal benchmarks for zinc and aluminum.

Notably, the stock has witnessed intense retail and institutional action through May and early June, following its structural demerger process to split the conglomerate into six independently listed pure-play companies.

At the time of writing, shares of Vedanta traded at Rs 332 .90 down by 1.26 per cent on the NSE.