Sebi Directs Vedanta To Pay Rs 77 Cr With 18% Interest In Overdue Dividend To Cairn UK
Market regulator Sebi has ordered India's leading mining company Vedanta to pay Rs 77.62 crore to Cairn UK for delay in dividend payments. Also, Sebi has barred Vedanta's key board of directors including Vedanta chairman and managing director Navin Agarwal, whole-time director Tarun Jain, chief executive officer Thomas Albanese and chief financial officer GR Arun Kumar to restrain from accessing the securities market for two months. Sebi also banned non-executive director Priya Agarwal and independent directors K Venkataramanan, Lalita D Gupte, Aman Mehta, Ravi Kant and Edward T Story from accessing the market for one month.
Sebi's order stems from the retrospective tax dispute involving Vedanta and Cairn UK. The Cairn-Vedanta tax dispute had risen under Finance Minister Pranab Mukherjee. In 2022, India put an end to 17 long-drawn disputes over the taxation of offshore sale of Indian assets in the past. The government's settlement scheme had sought to nullify the tax demands raised or confirmed before 28 May 2012 by applying an anti-abuse provision introduced in the Income Tax Act in 2012 during the Congress-led United Progressive Alliance government.
Sebi's case was based on the retrospective tax dispute where the Government of India had frozen Cairn UK's assets in India until March 31, 2016, preventing payments to Cairn UK. Vedanta argued it was restrained by the Income Tax Department. Sebi rejected Vedanta's arguments, stating the Income Tax Department order did not prohibit dividend transfers.
Sebi's decision comes after a Supreme Court directive in October 2022 to re-examine the case, following previous decisions in 2019 and 2017 not to take action against Vedanta Limited. Notably, the Securities Appellate Tribunal (SAT) has been without a Presiding Officer since Justice Tarun Agarwala's retirement in December 2023. Regstreet Law Advisors represented Vedanta Limited and its directors.
