With reference to the SEBI order of March 12, 2024, directing Vedanta Ltd to pay Rs 77.6 crore to Cairn UK Holdings Ltd, now Capricorn UK Holdings Limited (CUHL) as an interest payment for delayed payment of Rs 667 crore in dividend in the period between April 2016 and June 2017, the company wants to clarify the following:
The dividend payment by Vedanta Ltd. to CUHL was under a tax dispute between Cairn UK and Government of India. The said dividend amount was deposited in an “unpaid dividend account” as per law and was to be released by Vedanta Ltd. as per the orders of the Income Tax Department and which was subsequently released post orders of the Department and no benefit, whatsoever was derived by Vedanta Ltd. In fact, Para 111 of the SEBI order explicitly says that Vedanta Ltd. / Cairn
India Ltd. deposited unpaid dividend amount in special account called unpaid dividend account and it “did not benefit from the unpaid dividend amount during April 01, 2016 to June 15, 2017”. 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). There was absolutely no intent on the part of Vedanta Ltd to withhold the dividend payment from
CUHL. Vedanta Ltd. has an exemplary record in payment of dividends. Vedanta Ltd. has paid out dividends of over Rs. 84,000 crores to shareholders in the last ten years. It has never delayed, or been penalised for, any dividend payment. The amount of Rs. 667 crore is a very small amount in the context of the amount of dividend Vedanta Ltd pays. It defies logic and the company’s exemplary record to withhold payment to any shareholder. 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.
