Sebi asks Vedanta India to pay Cairn UK Holdings Rs 77.62 cr over late dividend payout
Markets regulator Securities and Exchange Board of India has asked Anil Agarwal-led metal and mining conglorerate Vedanta India to pay Cairn UK Holdings Rs 77.62 crore plus a simple interest of 18% per annum, for delaying dividend payments. The order on Sebi’s website noted that Vedanta must make the payment within 45 days or face further action.
Sebi asked Vedanta’s chairman and managing director (CMD) Navin Agarwal, whole-time director Tarun Jain, whole-time director and chief executive officer (CEO) Thomas Albanese and whole-time director and chief financial officer (CFO) GR Arun Kumar to restrain from accessing the securities market for two months and 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.
In 2017, Cairn UK Holdings had raised a complaint with Sebi alleging non-payment of dividend of Rs 340.64 crore by Cairn India Limited. In April 2017, Cairn India Limited was merged with Vedanta, wherein it was asked to pay the above amount for 184,125,764 equity shares of Cairn India owned by Cairn UK Holdings.
Cairns India, on its part, had submitted that all outstanding unpaid dividends of Rs 666.53 crore to the account of Cairn UK Holdings had been paid to the Income Tax Department (“ITD”) against recovery notice from Deputy Commissioner of IT, International Taxation, New Delhi, issued under Section 226(3) of the Income Tax Act, 1961, on June 19, 2017 and June 20, 2017. As the matter was before the IT department, Sebi had closed the complaint of Cairn UK Holdings, Moneycontrol reported.
Later, Cairn UK Holdings approached SAT who then asked Sebi to review the complaint. It also said that Cairn UK Holdings should approach the I-T authorities for return of the dividend amount.
However, SAT noted that if Cairn India had not released the dividends when there was no embargo on it, then Sebi should inquire into this and take action if there is a discrepancy.
Last week, Sebi warned Vedanta over disclosures made for its parent company. The company said the warning has no financial implication.
In a statement to the Bombay Stock Exchange (BSE), Vedanta said: “In a letter dated 29 February issued by the Securities and Exchange Board of India (SEBI), an administrative warning has been issued to the company and the company has been directed to take necessary corrective steps to strengthen the internal control for corporate announcement/press releases.”
The company said the details of the violation pertain to sections in respect of its publishing information related to its unlisted ultimate holding company. Vedanta Resources is the parent company for the India-listed Vedanta Ltd.
