Vedanta Limited, founded by billionaire Anil Agarwal, said on March 22 that the Securities Appellate Tribunal (SAT) issued a stay on the effect of SEBI's ruling on paying overdue dividends.
The market regulator ordered Vedanta India, formerly Cairn India Ltd, to pay Cairn UK Holdings Limited (CUHL) ₹77.62 Crore plus a simple interest rate of 18% per year for the delayed dividend payment.
SEBI instructed Navin Agarwal, the company's Chairman and Managing Director, along with Tarun Jain, a whole-time director, Thomas Albanese, a whole-time director and CEO, and GR Arun Kumar, a whole-time director and CFO, to refrain from participating in the securities market for two months. Priya Agarwal, a non-executive director, and independent directors K Venkataramanan, Lalita D Gupte, Aman Mehta, Ravi Kant, and Edward T Story were directed to abstain from accessing the market for one month.
In April 2017, CUHL filed a complaint with SEBI, stating that Cairn India Limited (merged with Vedanta on April 11, 2017) failed to pay a dividend of ₹340.64 Crore. The said dividend was due on 184,125,764 equity shares of CIL owned by CUHL.
CIL had submitted that all outstanding unpaid dividends of ₹666.53 Crore to CUHL's account had been paid to the Income Tax Department on June 19, 2017, and June 20, 2017, in response to a recovery notice issued by the Deputy Commissioner of IT, International Taxation, New Delhi under Section 226(3) of the Income Tax Act, 1961. SEBI closed CUHL's complaint while it was being handled by the IT department.
CUHL contacted SAT, who urged SEBI to review the allegation. The tribunal partially agreed with SEBI's decision, stating that CUHL should contact the income-tax authorities to request the return of the dividend sum. However, the panel emphasised that if Cairn India (now Vedanta India) had not delivered the dividends when there was no embargo in place, SEBI should investigate and take appropriate action if a breach occurred.
The IT Department's directive, which operated as a limitation on dividend payments, terminated on March 31, 2016. CIL maintained that the IT Department letters presented by CUHL as confirmation of the easing of this constraint were solely internal departmental communications and thus could not be acted on. According to the SEBI judgement, the regulator does not believe such a case has validity.
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