Mining conglomerate Vedanta Ltd on Wednesday (March 13) said it will appeal against the SEBI order directing the company to pay ₹77.6 crore to Capricorn UK Holdings Ltd (CUHL), formerly known as Cairn UK Holdings Ltd, for the delay in paying dividends.
SEBI had on Tuesday (March 12) ordered Vedanta to pay ₹ 77.62 crore to Cairn and also barred the firm’s entire board, including Anil Agarwal's brother Navin and daughter Priya, from accessing the capital market for a specified period.
In a statement issued by Vedanta, it said, "It was purely the unique circumstances that Cairn UK found itself in with the Income Tax department of the Government of India in 2016-17 that led to the ‘delay.’ Vedanta Ltd will appeal the SEBI order before the appropriate forum."
According to the company, the disputed dividend amount was deposited in an "unpaid dividend account" as per legal requirements, awaiting clearance by the Income Tax Department.
Vedanta clarified, "There was absolutely no intent on the part of Vedanta Ltd to withhold the dividend payment from CUHL." The company stressed its exemplary track record in dividend payments, amounting to over ₹84,000 crore in the last decade without any delays or penalties.
As part of the settlement between Cairn UK and the Government of India regarding the tax dispute, all dues, including the disputed dividend amount, were cleared. Additionally, Cairn UK agreed to forgo its rights to claim interest on the tax refund arising from the dividend, Vedanta said.
"When Cairn UK reached a settlement with the Government of India in its tax dispute, all dues were cleared including the said dividend amount. Also, as per the settlement with GoI on the tax dispute, Cairn UK undertook to surrender its rights to claim interest on such tax refund (arising on account of this dividend)," the company stated.
Vedanta asserted that the delay in dividend payment was a consequence of these exceptional circumstances rather than any deliberate action. "It defies logic and the company’s exemplary record to withhold payment to any shareholder," it said.
The regulator in its Tuesday order barred Navin Agarwal, who was chairman of Cairn India (now Vedanta Ltd), as well as three other top executives from accessing the securities market for two months. Those barred included Anil Agarwal’s close confidant Tarun Jain and then CEO Thomas Albanese.
They were “prohibited from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner, whatsoever, for a period of two months, from the date of coming into force of this order,” SEBI had said. It also barred six others, most of whom were directors of the company board, from accessing the securities market for one month.
This list included Anil Agarwal’s daughter Priya, who was a director on the board of Cairn India.
Others barred included K. Venkataramanan, Lalita D. Gupte, Aman Mehta, Ravi Kant, and Edward T. Story, "... for a period of one month, from the date of coming into force of this order," it had added.
