Vedanta on its last legs - will it walk free?Published by MAC on 2018-09-07
Volcan Ltd, a private family trust, last week announced its success in buying out Vedanta Resources, the most powerul British mining company that exploits India's vast - and growing - range of natural resources, including coal, oil, bauxite, iron ore and copper
It's not surprising news, but highly troubling, and indeed has quite shocking implications.
The move is one that a number of UK, Indian and Zambian mine watchers have been avidly following over the past three months, and attempting to prevent by lobbying various UK institutions, such as the FCA, the Takeover Panel, the FRC - and the High Court - before it's too late.
Briefly put, Vedanta's chairman Anil Agarwal, his family and cronies who run the Volcan Trust, has now bought out almost all independent minority shareholders in Vedanta Resources (which he also controls). This incestous manoevre opens the way for the mining megalith to delist from the London Stock Exchange and then go private.
Capping the volcano before it's finally erupted
Throwing Vedanta out of London in this fashion has been demanded by some critics for a long time - provided it is preceded by a diligent and judicious examination of the company's appalling record, and holding the Agarwal clique to account for its behaviour.
But, as the following Reuters report comments, this move now "could [also] reduce the scrutiny the company has received as a result of leaks and fatalities".
That's putting it mildly.
Agarwal's anodyne explanation for his maneouvre is likely to have been sparked by warnings that "dissidents" (including nominal shareholders, such as members of the London Mning Network and Foil Vedanta) would release a damning report, before this year's Vedanta Resources AGM.
This AGM occurs in London on 1st October 2018, and the dossier will meticulouly exposes the despoliation, pollution,industrial deaths, human rights abuses and chicanery for which Vedanta has been responsible.
Not to mention past crimes committed under Agarwal's watch - notably the sudden, horrendous, killings of at least 42 workers at its Korba chimney site in 2009, for which it was held criminally responsible by an Indian judge [See: The Killing Fields of Korba]
Just three weeks to go...
The time remaining to organise counter protests is very short.
So - how to meaningfully confront this serial offender (as Vedanta has been dubbed by the Norwegian Council on Ethics) from quitting the UK, without justice being done for thousands of those that the company has grievously offended? [See: What Norway's Ethcis Council told Vedanta ]
[Comment by Nostromo Research]
India's Anil Agarwal succeeds with Vedanta Resources buyout
By Noor Zainab Hussain
Reuters - UK Focus
3 September 2018
* Volcan gets valid acceptance for 92.31 pct of Vedanta's shares
* Vedanta's new CEO takes over
* Vedanta waits to hear if Indian copper smelter can be reopened (Adds
Anglo American deal speculation, details on new CEO, background)
Vedanta Resources' Chairman Anil Agarwal will take the London-listed miner private on October 1st, his family trust said on Monday, a step seen by some in the industry as a prelude to a potentially broader deal with bigger miner Anglo American.
The Volcan Investments trust, which held about two thirds of Vedanta's London-listed arm before it announced a roughly $1 billion buyout offer in
July, said holders of 26 percent of shares had agreed to sell.
Volcan now holds or has received acceptances for 92.31 percent of Vedanta's shares, it said, adding the offer would remain open for acceptances from shareholders until further notice.
Agarwal has said he wanted to buy out the London listing, which is dwarfed by Vedanta's Indian operation, to simplify the company's structure.
Analysts and fund managers have said the move could also reduce the scrutiny the company has received as a result of leaks and fatalities.
Industry players have speculated too that Agarwal, who holds almost 20 percent of Anglo American, wants some form of tie-up with the global
miner, and they see the move on Vedanta Resources as a step to creating a more sellable group.
Indian newspaper Mint reported in early July that Agarwal was seeking to merge Vedanta with Anglo's South African unit and Srinivasan
Venkatakrishnan, formerly head of Johannesberg-listed AngloGold Ashanti, has just taken over as CEO of Vedanta Resources.
Agarwal, who is Anglo American's biggest shareholder through his family trust, has played down speculation he is seeking a tie-up with Anglo.
However, he has indicated that he wants to grow Vedanta into a major diversified player.
Volcan had been expected to face some shareholder resistance to the buyout.
Vedanta's international operations are copper mines in Zambia and Vedanta Zinc, with operations in South Africa and Namibia. A tie-up with Anglo
American would give the Indian firm access to diamonds, copper, platinum, coal, iron ore, nickel and manganese markets.
The appointment of Venkat, who worked with AngloGold for 18 years and led it for five, follows a bounce in metals prices that has prompted Vedanta
to expand zinc and aluminium output, bolstering a recovery from the commodities price slump that ended in 2016.
The first Indian company to list in London in 2003 in a 500 million pound ($644 million) offering, Vedanta is also waiting to hear from a judicial
committee on whether it can reopen a copper smelter in southern India that was shut by authorities after violent protests in which 13 were killed.
(Additional reporting by Barbara Lewis in London; Editing by Patrick Graham and Mark Potter)