Supreme Court Holds Escrow Release Does Not Bar Fraud Inquiry, Remands Buyback Case to SAT

Case Snapshot

• Case Name: Securities and Exchange Board of India v. Vedanta Limited & Ors.

• Citation: 2026 INSC 978

• Bench: Justice J.B. Pardiwala and Justice K.V. Viswanathan

• Date of Judgment: September 9, 2026

• Area of Law: Securities Law, Fraud, Buyback Regulations, Market Manipulation

The Judgment in One Line

Supreme Court holds release of escrow under Buyback Regulations does not bar independent fraud inquiry under PFUTP Regulations, remands matter to SAT.

Why This Judgment Matters

This judgment clarifies the relationship between the Buyback Regulations and the PFUTP Regulations. It establishes that release of escrow under Regulation 15B(8) operates only on the question of forfeiture—not as an immunity from fraud proceedings. The ruling also provides important guidance on proving fraud under the PFUTP Regulations, emphasizing the need for corroborating circumstances and the distinction between suspicion and proof. The remand to SAT ensures proper factual scrutiny of trading data discrepancies.

Background

Vedanta Limited announced a buyback of 17.09 crore shares at Rs. 335 per share (Rs. 5,725 crore) through open market. During the six-month buyback period, the company purchased only 3.6 crore shares (21.48% of target), spending Rs. 1,225 crore. The company sought extension, which SEBI declined. SEBI released the escrow amount under Regulation 15B(8)(a) as the Volume Weighted Average Market Price exceeded the buyback price.

SEBI then initiat

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