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SC Seeks Centre's Response On PIL Against Vedanta Deal

BW Online Bureau Nov 08, 2014

<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[The Supreme Court on Monday sought the Centre's response to a plea challenging the validity of the $8.5 billion Cairn-Vedanta deal and seeking a CBI probe into the reasons for ONGC and government in "not asserting" their legal rights on the issue. A bench of justices D K Jain and Anil R Dave issued notice to the Centre seeking its reply on the PIL which also sought an audit by the Comptroller and Auditor General (CAG) into the various aspects of the deal. It also sought the CAG audit of the government's approvals for acquisition of majority stake of Cairn India by Anil Agarwal's Vedanta Resources on the ground that the offer in this regard should have gone first to the state-owned PSU ONGC. On the PIL, the bench issued notices also to the ONGC, Cairn Energy and Vedanta Resources. Earlier, on March 2, a bench of justices H L Dattu and C K Prasad had recused itself from hearing the plea. The PIL filed by a Bangalore resident Arun Kumar Agarwal stated that the ONGC, in an agreement with Cairn group, had a clause that in case the Cairn Group wanted to sell its shares in Cairn India, it would first offer the same to the ONGC. As per the clause, Cairn could sell its shares to other parties, only after the ONGC refused to buy the stake and the ONGC, thus had the right of first refusal (ROFR), it said. It alleged that the decision on the deal had been made on "extraneous considerations" and without taking into account the relevant aspects. The petition said had the ONGC, which was Cairn India's joint venture partner, been offered its ROFR for Cairn India's shares and had it exercised its right, the exchequer would have benefited by over Rs one lakh crore. Cairn Energy, however, signed a deal with the Vedanta group to sell its shares in Cairns India, without making an offer to the ONGC, the PIL said. Cairn India Ltd, a subsidiary of UK-based Cairns Energy, is the operator of the Rajasthan oil block. It entered into an agreement with UK-based Vedanta Group on June 16, 2010 to sell 51 to 60 percent of its shares in Cairn India, for a consideration of around USD 8.5 billion, without offering the shares to its partner ONGC in the joint venture as per the agreement of right of first refusal, the PIL had stated. Agarwal was also the first complainant in the 2G spectrum scam resulting in the lodging of the FIR. (PTI)