SAT orders SEBI to reconsider Cairn UK’s dividend claim on Cairn India

8 Jul 2022

The Securities Appellate Tribunal has directed the Securities and Exchange Board of India to hold an enquiry whether Cairn India, a subsidiary of Vedanta Ltd, violated the Companies Act and the regulator’s listing norms in withholding dividend of 3.41 bln rupees payable to Cairn UK Holdings

The appellate body, on Tuesday, ruled in a case filed by Cairn UK Holdings against SEBI’s rejection of its complaint against Cairn India for not paying dividends for three years from 2013-14 (Apr-Mar) to 2015-16.

Cairn UK Holdings held 9.8% stake in Cairn India during this period.

The market regulator had in an order in December 2019 rejected Cairn UK Holdings' complaint on the grounds that the company had handed over the unpaid dividend to the income tax authorities on their directions.

But SAT held in its order that the income tax department’s attachment order on the dividend payment expired on March 31, 2016, after which Cairn India could have paid the dividend due to Cairn UK Holdings.

In the wake of the SAT order, SEBI will have to reconsider Cairn UK Holdings’ claim and issue its order in the matter within six months.

If SEBI decides in Cairn UK Holdings favour, the 3.41 bln rupees dividend payment will reflect in the consolidated books of Vedanta.