SEBI directs Vedanta India to pay Cairn UK Holdings Rs.77.62 Crores for Delayed Dividend Payout

SEBI directs Vedanta India to pay Cairn UK Holdings Rs.77.62 Crores for Delayed Dividend Payout

It has been ordered to reimburse the amount within 45 days to avoid further action

The Securities and Exchange Board of India (SEBI) has directed the Anil Agarwal-led metal and mining conglomerate Vedanta India to pay Rs.77.62 crores, plus a simple interest of 18 percent per annum to Cairn UK Holdings for delaying the dividend payments.

The markets regulator has restrained Vedanta's chairman and managing director Navin Agarwal, whole-time director Tarun Jain, whole-time director and chief executive officer Thomas Albanese and whole-time director, and chief financial officer GR Arun Kumar from accessing the securities market for two months. The non-executive director Priya Agarwal and independent directors K Venkataramanan, Lalita D Gupte, Aman Mehta, Ravi Kant and Edward T Story have been denied entry for one month.

In 2017, Cairn UK Holdings had raised a complaint with SEBI alleging non-payment of Rs.340.64 crores dividend by Cairn India Limited. In April 2017, Cairn India was merged with Vedanta and was required to pay for 184,125,764 equity shares of Cairn India owned by Cairn UK Holdings.

On the other hand, Cairns India submitted that it had paid the outstanding unpaid dividends of Rs.666.53 crores (related to Cairn UK Holdings) to the Income Tax Department. This was after the 19 June 2017 and 20 June 2017 recovery notices from the Deputy Commissioner of Income Tax, International Taxation, New Delhi, issued under Section 226(3) of the Income Tax Act, 1961.

As the matter was before the IT department, it is said that SEBI had closed the complaint of Cairn UK Holdings.

However, later Cairn UK Holdings approached the Securities Appellate Tribunal (SAT) which directed SEBI to review the complaint. It also advised Cairn UK Holdings to approach the IT authorities to return the dividend amount.

However, SAT noted that if Cairn India had not released the dividends when there was no embargo, SEBI should inquire into it and take disciplinary action.

Recently, SEBI warned Vedanta over disclosures regarding its parent company Vedanta Resources. However, the former maintained that the warning had no financial implications.

In a statement to the BSE, Vedanta notified that the details of the violation pertained to sections regarding its publishing information related to the unlisted ultimate holding company.

It stated, "In a 29 February letter issued by SEBI, an administrative warning has been issued to the company. It has been directed to take necessary corrective steps to strengthen the internal control for corporate announcements/press releases."