British MPs hear evidence for de-listing Vedanta Resources from the London Stock Exchange

PRESS RELEASE 16th July 2014.

********* Under embargo until 20.30 hours 21st July 2014 ********

MPs HEAR EVIDENCE FOR DE-LISTING DODGY UK MINER VEDANTA RESOURCES & OTHERS

• Speakers tell MPs how high risk mining companies like Vedanta Resources are bringing shame on the London Stock Exchange.
• Fresh evidence of Vedanta’s criminal behaviour and tax evasion in India and Zambia revealed.
• UK’s role in protecting and assisting Vedanta is detailed.
• Speakers call for tighter regulation of the London Stock Exchange and the immediate investigation and trial of Vedanta Resources

Speakers from Foil Vedanta(1) and London Mining Network(2) today presented evidence in the House of Commons on the criminal behaviour of some London Listed mining companies, and called for better accountability measures and the de-listing of criminal companies. Focusing on contentious UK miner Vedanta Resources, they exposed new evidence of tax evasion, illegal land grabs, displacement, major pollution and water poisoning, as well as the UK’s role in promoting and protecting the company, and called for its immediate investigation and potential de-listing in London.

In a meeting hosted by John McDonnell MP in the House of Commons last  evening speakers told MPs, journalists, diplomats(3) and members of the public attending that high risk mining companies like ‘the world’s most hated company’ Vedanta Resources(4) are bringing shame on the London Stock Exchange, and demanded better accountability measures and the de-listing of criminal companies.

Miriam Rose and Samarendra Das from Foil Vedanta exposed fresh evidence on the criminal activities of Vedanta, including unseen footage of Vedanta’s illegal land grab of Reserve Forest at the sacred Niyamgiri Hills, as well as interviews with people displaced by Vedanta, and now destitute, at Vedanta’s now doomed Lanjigarh refinery(5).

New testimonies from communities suffering the intergenerational effects of major water poisoning by Vedanta is Zambia, who have never been compensated(6), and disturbing footage of the 2009 chimney collapse at Vedanta subsidiary BALCO which killed at least 40 people(7) was shown.

Speakers detailed Vedanta’s tax evasion and transfer mis-pricing in Zambia(8), as well as illegal mining and export of 144 million tonnes of iron ore from Goa in 2011/12 (9).

The UK’s role in assisting and protecting this contentious mining company was exposed – from the roles of the Department for International Development (DfID) and former British High Commissioner to India Sir David Gore Booth in launching the company on the London Stock Exchange in 2003(10), to David Cameron’s personal assistance in forcing the Indian government to sell lucrative oil company Cairn India to Vedanta in 2011 (11). Cairn India are now drilling in the pristine biosphere region of the Gulf of Mannar, Sri Lanka.

The pattern of human rights abuse, environmental damage and violation of Indigenous Peoples’ land rights among London Listed mining companies was outlined by Richard Solly from London Mining Network, bringing in the mining majors Rio Tinto, BHP Billiton, Glencore Xstrata and Anglo American – all listed in, and theoretically accountable to, London. London Mining Network’s 2012 report ‘UK listed mining companies and the case for stricter oversight’, gives specific recommendations for the tightening of listings rules to limit these abuses.

The speakers highlighted the failure of UK listing rules to prevent poor corporate governance, noting that boss Anil Agarwal owns 69.59% of Vedanta Resources, making other shareholders essentially irrelevant in decision making, and echoed the calls of other investors to ensure a 50% free float requirement for public companies on the LSE(12). They also noted the role of British controlled tax havens in enabling insider trading, transfer mis-pricing and tax evasion on a major scale.

They critiqued the UK’s failure to regulate mining companies or hold them to account including: the UK’s rejection of ILO 169 on the rights of indigenous and tribal people’s(13), the failure of ‘revenue transparency’ initiatives such as the Extractive Industries Transparency Initiative (EITI), and the OECD complaints system.

Finally, the speakers recommended that proper accountability measures, and recourse to justice for the victims of criminal behaviours by UK listed mining companies be introduced in London. This should include the independent auditing of company and subsidiary accounts to establish whether tax evasion is occurring.

The speakers called strongly for Vedanta Resources to be immediately investigated, trialled and potentially de-listed from the London Stock Exchange for the catalogue of crimes presented by them.

Concern over London’s protection of dubious mining and resource-based companies listed on the London Stock Exchange has been a regular topic in the House of Commons over several years. In 2011 Richard Lambert, the former Director General of the Confederation of British Industries (CBI), told the Financial Times;

‘It never occurred to those of us who helped to launch the FTSE 100 index 27 years ago that one day it would be providing a cloak of respectability and lots of passive investors for companies that challenge the canons of corporate governance such as Vedanta…’

Since then there have been parliamentary debates, a consultation on the role of Financial Services Authority, hundreds of Early Day Motions, and even the de-listing of contentious mining company Eurasian Natural Resources Corporation (ENRC) following a Serious Fraud Office investigation which exposed major kickbacks being paid to African leaders. The Department of Business Innovation and Skills is currently carrying out a consultation on the extractive industries sector to establish the need for tighter regulation.

Samarendra Das from Foil Vedanta says:

“When Vedanta launched on the London Stock Exchange in 2003 they did not have the rights to mine the sacred Niyamgiri hills, nor the environmental or social license to operate at Lanjigarh. Now we should be asking how the London Stock Exchange, JP Morgan, HSBC, and the Financial Times omitted this basic due diligence and gave Vedanta the “cloak of respectability” that comes with a London listing. Perhaps it is time to bring to trial those who are responsible for jeopardising the credibility that the City of London claims.”

Richard Solly from London Mining Network says:

“London Mining Network believes that mining companies listed on UK stock exchanges need to be regulated much more strictly. We made specific recommendations in the report we published in February 2012 and have repeated that call in the evidence we have presented to the current inquiry into extractive companies by the Select Committee on Business, Innovation and Skills. It is time that the British Government started taking this seriously.”

John McDonnell MP, who hosted the talk, says:

“We cannot stand by and allow London to be used as the financial base for companies that degrade our planet, exploit their workers and abuse the human rights of extremely vulnerable communities. We need to devise a comprehensive strategy to address this exploitation, on our doorstep. “