US COURT FINES VEDANTA UNIT $96 MILLION DAMAGES

A US court has slapped STI, a unit of Vedanta Group-backed optic fibre manufacturer Sterlite Technologies (STL), with damages of $96 million (around Rs 806 crore) for trade-related rights infringements involving Italian rival Prysmian.

A U.S. District Court in South Carolina has ordered Sterlite Technologies (STL), a subsidiary of Vedanta Group, to pay $96.5 million in damages to Prysmian, an Italian rival, for the misappropriation of trade secrets. This ruling follows a three-week trial during which the jury found that STL unlawfully possessed confidential information belonging to Prysmian, including customer lists, product plans, and expansion strategies.

Case Details

• Verdict Date: August 9, 2024
• Damages Awarded: $96.5 million to Prysmian and an additional $200,000 against Stephen Szymanski, STL's Executive Vice President, for his role in the infringement.
• Background: The case stemmed from allegations that Szymanski, who previously led Prysmian’s optical fiber cable division in North America, transferred thousands of pages of proprietary information to STL after joining the company in August 2020.

Company Responses

STL has publicly stated its intent to "aggressively" contest the ruling, asserting that the verdict is not supported by the evidence presented during the trial. The company reported a loss of ?82 crore on revenues of ?1,140 crore for the first quarter of fiscal 2025, indicating financial strain amidst the ongoing legal challenges. Prysmian's management expressed satisfaction with the jury's decision, emphasizing the importance of protecting trade secrets and fair competition in the marketplace. They highlighted that the ruling reaffirms the legal protections surrounding proprietary business information in the U.S..

Implications

This case marks one of the largest fines imposed on an Indian company in a trade secrets dispute and could have significant repercussions for STL's operations and future participation in U.S. government-funded projects, such as the Broadband Equity, Access, and Deployment (BEAD) program, which allocates $42.45 billion for broadband infrastructure improvements

Sterlite Technologies Limited (STL) in India

• Headquartered in Pune, Maharashtra
• Founded in 2000 as Sterlite Telecom Systems, later renamed to Sterlite Optical Technologies and then Sterlite Technologies
• Majority owned by Vedanta Group (45% stake)
• Specialized in optical networking, including optical fiber and cables, network design and deployment, and network software
• Holds 636 patents and operates in over 150 countries
• Reported revenue of ?1,140 crore in Q1 FY2025, with a net loss of ?82 crore

Sterlite Technologies Abroad

• Operates subsidiaries in several countries including UK, Italy, China, UAE, and USA
• Acquired Metallurgica Bresciana S.p.A. and Optotec S.p.A. in Italy
• Established manufacturing facilities in China and Italy
• Expanding global footprint through organic growth and strategic acquisitions

Patents and Intellectual Property Rights

• Owns 636 patents as of 2022
• All patents, trademarks, and intellectual property rights are vested in Sterlite Technologies unless otherwise indicated
• Licenses some intellectual property from third parties for use on its websites and platforms

Market Capitalization

• Listed on Bombay Stock Exchange and National Stock Exchange of India
• Current market capitalization not available in the provided search results

Legal Disputes

• In 2002, Sterlite was sued by Fitel USA for optical fiber patent infringement, settled in 2010
• In 2024, a U.S. court ordered Sterlite to pay $96.5 million in damages to Prysmian for misappropriation of trade secrets, which Sterlite plans to contest

History and Growth

• Established in 2000, initially focused on telecom cables
• Expanded into optical fiber cables, broadband access networks, and copper telecom cables in the 2000s
• Secured 50% market share in India's optical fiber industry by 2012
• Diversified into network software and services in recent years.

Vedanta Group: Vedanta Group began as a scrap metal dealership and evolved into a diversified mining company.

Key milestones include:

• 2001: Acquired a majority stake in Bharat Aluminium Company (Balco).
• 2003: Listed on the London Stock Exchange, raising $876 million through an IPO.
• 2007: Acquired a 51% controlling stake in Sesa Goa, India's largest iron ore producer.
• 2011: Acquired a controlling stake in Cairn India, enhancing its oil and gas portfolio.
• 2015: Merger of Sterlite Industries and Sesa Goa to form Vedanta Limited.
• 2018: Announced plans to take Vedanta Resources private.

Operations

Vedanta operates in multiple sectors:

• Mining: Iron ore, zinc, lead, and copper mining primarily in India and Africa.
• Oil and Gas: Significant operations in India, with interests in oil fields.
• Power Generation: Operates commercial power stations in India, contributing to its energy portfolio.

• Headquarters: Mumbai, India
• Founded: 1976 by Anil Agarwal
• Industry: Mining and natural resources, including zinc, lead, silver, oil and gas, iron ore, steel, aluminum, and power generation.

Market Capitalization

• As of August 30, 2024, Vedanta Limited has a market capitalization of approximately ?179,716 crores (around $21.5 billion) .

Financial Standing

• Revenue: For the fiscal year ending March 2022, Vedanta reported net sales of ?132,732 crores and a net profit of ?18,802 crores .
• Recent Performance: In Q4 FY 2023-24, Vedanta reported an EBITDA of ?87,600 crores, driven by lower production costs in aluminum and zinc .

Role in the Indian Economy

• Vedanta is one of India's largest mining and natural resources companies, significantly contributing to the economy through job creation, infrastructure development, and resource extraction.
• The company employs over 87,500 people directly and indirectly, supporting local economies in areas where it operates .

Role in Infrastructure Development

• Vedanta has invested in energy projects, including thermal power plants with a total capacity exceeding 4,000 MW in Odisha and Punjab, contributing to India's energy needs .
• The company also plays a role in developing essential materials for infrastructure, such as aluminum and steel, which are critical for construction and manufacturing sectors.

Awards and Recognition

• Vedanta has received numerous awards for its operational excellence and sustainability initiatives, including: Gold and Silver Awards for Sesa Goa Iron Ore from the AIGC Excellence Award Committee. Ranked 6th by S&P Global Corporate Sustainability Assessment in 2022 .
• The company is recognized for its commitment to environmental, social, and governance (ESG) standards, aiming for carbon neutrality by 2050 .

Vedanta Group stands as a pivotal player in India's mining and natural resources sector, with a strong market presence, significant financial performance, and a commitment to infrastructure development. Its extensive operations and investments contribute to both local and national economic growth, making it a key player in the Indian economy.

Disclaimer: This update is provided by Syndicate Capital, an asset management research firm, for informational purposes only. The information contained herein is based on publicly available data and professional analysis. It does not constitute financial, legal, or investment advice. Syndicate Capital makes no guarantees regarding the accuracy, completeness, or timeliness of the information provided. Readers are advised to conduct their own research and consult with qualified professionals before making any investment or business decisions. Syndicate Capital is not responsible for any actions taken based on this information.