The June 2023 summons issued by the directorate of enforcement (ED) Vedanta Ltd’s chief financial officer (CFO) confirms that the company has been under formal investigation over large overseas payments made to its London-based parent, Vedanta Resources Ltd (VRL), according to a new report by investigative research group Viceroy Research. The report alleges that Vedanta’s attempts to justify these payments with limited documentation and questionable claims about a foreign office are unlikely to satisfy regulators this time.
Viceroy says it obtained a copy of the ED summons, dated 28 June 2023 which compelled Vedanta’s CFO to appear before the agency and produce detailed records of royalty payments, intercompany loans, and guarantee fees made to VRL between 2017 and 2023. The summons was issued under the Foreign Exchange Management Act (FEMA), signalling a formal enforcement action rather than a routine query.
According to Viceroy, ED’s inquiry stems from concerns about the legality and justification of hundreds of millions of dollars transferred overseas under the guise of brand or royalty fees. The group claims that a meeting in 2023 between Vedanta executives, including CFO Sonal Shrivastava and Ajay Agarwal, and ED led to a rebate of US$123mn (million) from VRL to Vedanta Ltd, an acknowledgment that the brand fee structure was excessive or non-compliant.
Following that meeting, VRL reportedly introduced 'refunds' of overpaid brand fees to its subsidiaries at the end of each financial year, a quiet correction that the report describes as evidence of regulatory non-compliance.
However, Viceroy asserts that neither the meeting, the rebate, nor the subsequent refunds were ever disclosed to investors or bondholders, despite their significant impact on Vedanta’s financial position and its parent’s debt serviceability.
The research group further criticised ICICI Bank, which served as the authorised dealer for the Reserve Bank of India (RBI), for processing these substantial foreign remittances 'without effective oversight'. This, it claimed, amounted to a procedural lapse that enabled potentially unlawful transfers to occur undetected for years.
Viceroy’s latest release argues that regulators now view Vedanta’s brand fee arrangement as 'potentially unlawful and unjustifiable', noting that the company’s earlier explanation to ED—that services were rendered from a functioning London office—has since been proven false. During the 2023 probe, Vedanta had maintained that brand management and advisory services were provided from London, helping it avoid heavier penalties and settle with a rebate.
However, the situation has changed. In 2025, Vedanta reportedly admitted that there is no operational London office and that all related services are carried out in India by Vedanta Ltd staff. Viceroy says it had been informed by former employees that the actual cost of these services is roughly US$200,000 a year—insignificant compared to the hundreds of millions in brand fees sent overseas.
“This time regulators are unlikely to accept Vedanta’s token compliance to justify hundreds of millions in overseas payments,” Viceroy says in its statement, suggesting that the company could face a far more serious enforcement response.
Viceroy’s findings echo long-standing concerns about the use of complex intercompany transactions by highly leveraged conglomerates. Brand and royalty fees, in particular, have drawn scrutiny from Indian regulators for potentially serving as channels to move funds abroad under the pretext of intellectual property or management services.
The report also highlights ICICI Bank’s role in facilitating these payments as the authorised dealer under FEMA, claiming that the institution failed to flag or question unusually large transfers that may have lacked proper documentation.
Viceroy emphasised that its report is based on official documents and information from public and former employees.
Vedanta Ltd, one of India’s largest natural resources companies, has yet to issue a statement in response to Viceroy’s latest claims. In the past, the company has consistently maintained that all related-party transactions comply with Indian regulations and that brand fees represent legitimate payments for services provided by the parent entity.
The renewed scrutiny comes at a sensitive time for Vedanta which has been navigating a challenging refinancing process for its debt-laden parent company, Vedanta Resources. Any confirmation of regulatory breaches could complicate its efforts to raise funds and reassure investors about its governance standards.
Viceroy’s report concludes that regulators are now unlikely to overlook the inconsistencies in Vedanta’s explanations, given the admission that no overseas office exists. It argues that ED’s fresh examination may expose deeper issues within Vedanta’s inter-company arrangements and accounting practices.
“The time for token compliance is over,” the report says, calling on regulators to take a firmer stance on cross-border financial flows that appear to bypass India’s exchange control framework.
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