New Delhi, Dec. 17 -- The National Company Law Tribunal (NCLT) allowed Vedanta Ltd to go ahead with a proposed demerger of its India operations, a restructuring plan that the ministry of petroleum and natural gas had opposed. "The sanction to the company scheme is granted," the Mumbai bench of the NCLT said on Tuesday. The written order is yet to be posted. The bench comprising Justices Nilesh Sharma and Charanjeet Singh Gulati had reserved its order on the matter in November after extensive hearings on Vedanta's application seeking regulatory clearance for the demerger. "The approval marks a key milestone in Vedanta's transformation into focused, sector-leading companies with clear strategic mandates and dedicated capital structures," a Vedanta spokesperson said in response to Mint's query. "The company will now proceed with the necessary steps to implement the scheme." The petroleum ministry had raised multiple objections during the proceedings, flagging concerns over the potential financial risks arising from the restructuring, alleged misrepresentation of India's hydrocarbon assets, and inadequate disclosure of liabilities. The ministry's opposition emerged as a key hurdle to the proposed demerger. A key concern of the ministry was related to Malco Energy Ltd, a Vedanta subsidiary that would emerge as a separate entity after the planned demerger. The ministry argued that Malco faces serious liquidity risks, pointing out that the company had a negative net worth of Rs.94 crore as of 31 March 2024, and reported cash losses of Rs.85.64 crore in FY24 and Rs.244 crore in FY23. The ministry said Malco could, "in all probability," slip into liquidation, making recovery of government dues "virtually impossible." The ministry also highlighted a long-pending dispute concerning Vedanta's RJ oil and gas block in Rajasthan, noting that a substantial portion of the company's debt was related to government claims linked to the block. According to the ministry, Vedanta has not adequately disclosed these liabilities in its demerger scheme. The dispute stems from a partial arbitral award involving Rs.5,600 crore in dues to the government, which the ministry said had been "brushed aside." The amount is related to the government's claim over disallowance of costs and reallocation of common costs among fields in the oil block. The matter is pending before the Delhi high court, where orders have been reserved. Vedanta, however, contested the ministry's objections. The company told the tribunal that it had already secured approval from the Securities and Exchange Board of India after revising its demerger scheme in line with regulatory requirements. Vedanta argued that while the ministry is a sectoral regulator, it is neither a creditor nor a stakeholder in the company and therefore lacks the locus standi to oppose the scheme before the tribunal....