A new report from investigative research group Viceroy Research has alleged that Vedanta group promoters are siphoning profits from the government-backed Hindustan Zinc Ltd (HZL) through a joint venture (JV) named Minova Runaya Pvt Ltd. According to the report, the JV is being used as a vehicle for margin extraction via inflated pricing, dubious asset sales and exclusive contracts — all designed to benefit the Agarwal family while hollowing out HZL’s profitability.
The scathing report, titled 'Vedanta – Meet the Agarwals – Minova Runaya', accuses Minova Runaya, a 51:49 JV between Minova Minetek Pty Ltd and the promoter-owned Runaya Metsource LLP of engaging in a consistent pattern of profit siphoning from HZL over the past four years. Viceroy alleges that the JV, set up in 2020, has functioned largely as a 'passthrough' entity with minimal manufacturing capability and that it exists primarily to funnel margins through a promoter-controlled ecosystem.
The report claims HZL has been Minova Runaya’s only customer since inception, bound by a promoter-mandated monopoly to purchase all of its ground support products, including resin capsules, rock bolts and wire mesh exclusively from the JV. These are commoditised products that could be sourced more cheaply elsewhere. Yet, Minova Runaya is said to slap a fixed 30% markup on goods before selling them to HZL, with all pricing risk protected by a formula-based mechanism indexed to steel, crude oil and inflation, the report says.
Viceroy alleges that the Agarwal family effectively captures this markup via their stake in Runaya Metsource and that these inflated earnings are then distributed to both JV partners through dividends, well beyond the reach of Vedanta’s other stakeholders or VRL’s creditors.
Sharing documents from Union ministry of corporate affairs (MCA), Viceroy Research, in a post on X says, "MCA documents confirm that as of March 2025, Runaya Metsource, the 49% owner of Minova Runaya JV is 99% owned by Twinstar Overseas, whose ultimate beneficiary is Anil Agarwal."
Alarmingly, the report highlights glaring financial discrepancies. In FY23-24, Minova Runaya’s declared revenue from HZL was Rs253 crore, even though its total revenue stood at Rs222 crore, a mathematical impossibility. For each of the past three years, reported HZL revenue exceeded Minova Runaya’s total reported revenue, raising serious questions over the veracity of its disclosures, Viceroy says.
Further red flags appear in asset sale disclosures. Minova Runaya claimed to have sold Rs543 crore worth of tangible fixed assets to HZL between FY20-21 and FY23-24. Yet, Viceroy says, these sales are not traceable in either Minova’s balance sheets, which show far lower asset holdings, or in HZL’s filings. The report suggests this could point to either undisclosed related-party transactions or a staggering audit failure.
Viceroy’s report also criticises Minova Runaya’s claimed manufacturing activity. While the company began supplying HZL as early as FY20-21, it admitted to having manufactured nothing until FY23-24 and, even then, only wire mesh, a product that can be mass-produced using low-cost automated setups. Images from the facility uploaded by employees on social media platforms and Google Maps showed sparse machinery, minimal inventory, lack of industrial-scale infrastructure and inadequate ventilation, more akin to a warehouse than a manufacturing site, the report points out.
Employee costs, depreciation expenses and capital outlays also appear inconsistent with a growing industrial business. Revenues more than doubled between FY21-22 and FY23-24, but employee expenses grew only 20%, and material costs rose just 42%. "These numbers suggest that Minova Runaya is a trading operation — not a manufacturing one — that simply buys from one Vedanta entity and sells to another at a premium."
In fact, the report points to related-party transactions where Minova Runaya sourced nearly Rs36 crore worth of materials from ESL Steel, another Vedanta group company. These materials were then sold to HZL with the same 30% markup, a textbook example of intra-group circular profit extraction, according to the report.
The sourcing strategy further undermines Minova Runaya’s case. With total imports amounting to just Rs5.49 crore in FY23-24, including a negligible Rs0.23 crore in raw materials, the company is evidently not relying on high-cost or high-risk global supply chains to justify its margins.
Viceroy paints this as part of a broader pattern within the Vedanta group, where the promoter core allegedly uses shell companies and captive contracts to drain value from operational businesses. The report references previous investigations into Vedanta Semiconductor and Serentica Renewables (Read:
Vedanta Semiconductor Is Rs2,500 Crore 'Dhoke Ka Samraajya', Alleges Viceroy Research) which were also accused of similar practices involving inflated asset transfers and non-transparent capital flows.
The report closes with a sharp critique of HZL’s governance, proxy advisors, and credit rating agencies, calling them out for either failing to notice obvious anomalies or deliberately overlooking them. “The filings in this report cost Rs449 to obtain,” it states. “The images of the factory have been on Google Maps since 2020. These red flags are neither well concealed nor complicated to understand.”
As a partly government-owned company, Hindustan Zinc’s exposure to such alleged profit extraction raises fresh questions about the governance standards at India’s large public-private enterprises. The Union ministry of mines and minority investors are likely to come under pressure to demand clarity on the terms of HZL’s contract with Minova Runaya, as well as transparency on past transactions.
Vedanta Ltd and its promoters have not issued a public response to Viceroy Research's report on Minova Runaya at the time of writing. If the allegations are proven true, they could add to Vedanta’s already mounting scrutiny over corporate governance practices and related-party dealings.
With multiple discrepancies in financial statements, asset sales and governance mechanisms exposed in the report, Minova Runaya’s operations and its dealings with HZL are now likely to face intense scrutiny from regulators, investors and, possibly, enforcement agencies.
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