14 Mar 2024 , 11:26 AM
Vedanta Ltd, owned by billionaire Anil Agarwal, announced on Wednesday that it will appeal Sebi’s levying of a ₹77.6 Crore penalty for delaying dividend payments to its former shareholder, Cairn Energy, claiming that the UK firm waived its right to claim interest when it settled a retrospective tax demand with the government.
On Tuesday, Sebi ordered Vedanta to pay ₹77.62 Crore to Scottish explorer Cairn and prevented the company’s whole board, including his brother Navin and daughter Priya, from accessing the capital market for the same.
Vedanta Ltd stated in a release that it intends to challenge the Sebi order through the suitable channels.
In 2011, Vedanta acquired a controlling share in Cairn Energy’s Indian subsidiary, Cairn India Ltd. Cairn retained a minority holding in Cairn India, which was later combined with its parent, the Mumbai-listed Vedanta Ltd.
In 2014, the Income Tax Department granted it the authority to impose taxes retroactively, allowing it to seek ₹10,247 Crore in capital gains tax on the Scottish explorer for a 2006 restructuring and listing of Cairn India.
The tax agency attached Cairn Energy’s remaining ownership, and Vedanta ceased paying dividends, citing the disagreement.
The UK corporation sought Sebi to halt the dividend payment while contesting the tax claim.
According to the Sebi’s ruling, Vedanta breached the law by withholding dividends due to the UK business between January 2014 and June 2017.
The tax department’s attachment terminated in March 2016. In their 2017 complaint to SEBI, Cairn Energy stated that despite reminders and the release of the attachment, dividends were not paid until 2017, and the business was required to pay interest on delayed payments.
“The specified dividend sum was placed in an ‘unpaid dividend account’ in accordance with regulations. Vedanta Ltd was obligated to disburse it as per directives from the Income Tax Department. Following the department’s instructions, it was eventually disbursed by Vedanta Ltd, with no benefit accruing to the company,” the firm stated in its release.
It further stated that after Cairn UK settled its tax issue with the government, “all dues were cleared, including the said dividend amount”.
For feedback and suggestions, write to us at editorial@iifl.com
Related Tags
IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000
IIFL Capital Services Support WhatsApp Number
+91 9892691696
IIFL Capital Services Limited - Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
ARN NO : 47791 (AMFI Registered Mutual Fund Distributor)
This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.