Vedanta Resources is creating happiness. This might seem like a tall order for a mining group, but it must be true because the company tells us how it’s sent some nascent film-makers around India to snap pictures of smiling kiddies. It’s also pledging to present itself in an open and transparent manner. It must be true, because the company’s global communications head tells us. Despite its prominent position in the FTSE100, Vedanta has found happiness elusive and transparency hard. On Tuesday, it felt moved to put out a statement after the shares jumped 7%. Here it is, in full:

“Vedanta notes media speculation regarding a potential group restructuring. Vedanta’s stated strategy is to simplify and consolidate its corporate structure. Management reviews options to deliver this strategy on an ongoing basis and will update the market as appropriate.”

This knocked 5%, or £200 million, off the share price on Wednesday. Vedanta is one of the toughest stocks in the index to analyse. It’s the family-controlled top company in a pyramid of majority-owned subsidiaries and, sad but true, the interests of outside shareholders and the ambitions of the company’s Indian founders may not always coincide. The share rating has never recovered from the announcement (triggered by a leak) of the purchase of a controlling stake in Cairn India in August 2010.

The real shocker was not Vedanta’s plunge into the oil business, but the fact that it was using its listed subsidiary, the iron ore miner Sesa Goa, as a piggy bank to help pay for it. However fine an oil prospect Cairn may be, the outside shareholders of Sesa Goa hadn’t expected to find themselves owning 20% of it, and the shares have disappointed since the deal was announced, despite booming prices for iron ore.

Now the “media speculation” is about a shuffle of liabilities between Vedanta and another listed subsidiary, Sterlite, which would cut Vedanta’s massive $10.4 billion of debt by $2.4 billion. Sterlite’s outside shareholders had successfully resisted an earlier attempt to “simplify and consolidate its corporate structure” which they felt was being done at their expense.

Perhaps realising that the earlier statement didn’t quite cut it, an anonymous official later explained that the idea was to slice and dice the various Vedanta interests, so that each listed offshoot would own a bit of all the others. It’s hard to see how some pick’n’mix proposal will achieve the open and transparent look that Vedanta claims to be seeking, but the buyers of shares in Sesa Goa and Sterlite can’t say they didn’t notice the presence of a controlling shareholder. Creating happiness, indeed, but for whom?

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