U.S. short-seller Viceroy Research said it has taken a short position in the debt of Vedanta Resources, alleging the London-based parent of Indian miner Vedanta Ltd is “systematically draining” cash from its operating subsidiaries and runs a “Ponzi-like” structure that poses an under-appreciated risk to creditors. The 85-page report, released on 9 July, claims billions of rupees in expenses are hidden off balance sheet and that Vedanta’s aggressive dividend policy favours the parent rather than the operating company’s cash flow. The report triggered a sharp market reaction: Vedanta Ltd shares slid as much as 7.8 % in Mumbai before trimming losses, while Hindustan Zinc fell about 5 %. Vedanta’s U.S.-dollar bonds also weakened. Viceroy said it is betting against the group’s debt because the structure is “financially unsustainable” despite a demerger plan and a target to cut parent-level debt by $3 billion over three years. Vedanta dismissed the allegations as a “malicious combination of selective misinformation and baseless claims” issued without seeking the company’s response. The group said it remains focused on operations and growth. Vedanta Resources’ standalone net debt stood at roughly $4.9 billion at end-March, according to its latest annual report. The short-seller attack comes three weeks after Vedanta Ltd raised ₹3,028 crore by selling a 1.6 % stake—about 66.7 million shares—in Hindustan Zinc through block trades. The disposal, smaller than the ₹7,500 crore size first flagged by market sources, sent Hindustan Zinc shares down 6-7 % on 18 June. Together, the stake sale and Viceroy’s broadside underline the financial and governance scrutiny facing Anil Agarwal’s conglomerate ahead of its planned breakup.