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I-T Dept orders taking away of $104 mn dividend due to Cairn Energy

I-T takes action to recover Rs 10,247 cr retrospective tax from Cairn Energy of UK

Jyoti Mukul  |  New Delhi 

Cairn

Plc said on Monday the Indian income tax (I-T) department had issued an order to Ltd, directing it to pay the government any sums that were due to the Edinburgh-based company. 

Cairn said owed it $104 million, including historical dividends of $53 million and a further dividend of $51 million after the merger of Cairn India and

The June 16 direction comes even as a tribunal on June 9 issued an order memorialising numerous confirmations from the Indian government that the dividends were no longer restricted and authorising the order be provided to Cairn India, now part of

said it had advised banks, holding approximately Rs 666 crore in the dividend account to transfer the amount to the I-T authorities. “It may be recalled that the dividends due to Plc for the last three years were lying in an unpaid dividend account as initially they were subject to an attachment order u/s 281B by the Tax Department and were not available for use by Cairn (now Ltd),” said.

In March, Cairn announced it had received confirmation from the Indian government through an tribunal that dividends of $53 million due from Cairn India were no longer restricted and it requested immediate release of that sum.

“Notwithstanding this action by the GoI, proceedings are progressing in respect of the group’s claim under the UK-India Bilateral Investment Treaty. Cairn is seeking full restitution for treaty breaches resulting from the expropriation of its investment in India in 2014, the attempts to enforce measures and the failure to treat the company and its investments fairly and equitably,” Cairn said in a statement.  

The company said it had a “high level of confidence” in its case under the treaty in addition to resolution of the dispute. Its claim seeks damages equal to the value of the group’s residual shareholding in Cairn India at the time it was attached (approximately $1 billion).

The company commenced against Indian tax authorities in 2015. The seat of the arbitration is The Hague in the Netherlands and final hearings for the tribunal are scheduled for January 2018.

Cairn UK Holdings Limited (“CUHL”), a direct subsidiary of Cairn Energy, received an assessment order from the Indian tax authorities relating to the intra-group restructuring undertaken in 2006 prior to the IPO of Cairn India. 

It cited a retrospective amendment to the Indian tax law introduced in 2012 and claimed Rs 10,200 crore (approximately $1.5 billion) plus interest backdated to 2007 totalling Rs 18,800 crore (approximately $2.8 billion). The total assets of CUHL comprise the group's 9.8 per cent shareholding in Cairn, which has now been converted to a shareholding in and any recovery by the Indian authorities will be limited to such assets, according to

Dollar

graph

 

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I-T Dept orders taking away of $104 mn dividend due to Cairn Energy

I-T takes action to recover Rs 10,247 cr retrospective tax from Cairn Energy of UK

I-T takes action to recover Rs 10,247 cr retrospective tax from Cairn Energy of UK
Plc said on Monday the Indian income tax (I-T) department had issued an order to Ltd, directing it to pay the government any sums that were due to the Edinburgh-based company. 

Cairn said owed it $104 million, including historical dividends of $53 million and a further dividend of $51 million after the merger of Cairn India and

The June 16 direction comes even as a tribunal on June 9 issued an order memorialising numerous confirmations from the Indian government that the dividends were no longer restricted and authorising the order be provided to Cairn India, now part of

said it had advised banks, holding approximately Rs 666 crore in the dividend account to transfer the amount to the I-T authorities. “It may be recalled that the dividends due to Plc for the last three years were lying in an unpaid dividend account as initially they were subject to an attachment order u/s 281B by the Tax Department and were not available for use by Cairn (now Ltd),” said.

In March, Cairn announced it had received confirmation from the Indian government through an tribunal that dividends of $53 million due from Cairn India were no longer restricted and it requested immediate release of that sum.

“Notwithstanding this action by the GoI, proceedings are progressing in respect of the group’s claim under the UK-India Bilateral Investment Treaty. Cairn is seeking full restitution for treaty breaches resulting from the expropriation of its investment in India in 2014, the attempts to enforce measures and the failure to treat the company and its investments fairly and equitably,” Cairn said in a statement.  

The company said it had a “high level of confidence” in its case under the treaty in addition to resolution of the dispute. Its claim seeks damages equal to the value of the group’s residual shareholding in Cairn India at the time it was attached (approximately $1 billion).

The company commenced against Indian tax authorities in 2015. The seat of the arbitration is The Hague in the Netherlands and final hearings for the tribunal are scheduled for January 2018.

Cairn UK Holdings Limited (“CUHL”), a direct subsidiary of Cairn Energy, received an assessment order from the Indian tax authorities relating to the intra-group restructuring undertaken in 2006 prior to the IPO of Cairn India. 

It cited a retrospective amendment to the Indian tax law introduced in 2012 and claimed Rs 10,200 crore (approximately $1.5 billion) plus interest backdated to 2007 totalling Rs 18,800 crore (approximately $2.8 billion). The total assets of CUHL comprise the group's 9.8 per cent shareholding in Cairn, which has now been converted to a shareholding in and any recovery by the Indian authorities will be limited to such assets, according to

Dollar

graph

 

image
Business Standard
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I-T Dept orders taking away of $104 mn dividend due to Cairn Energy

I-T takes action to recover Rs 10,247 cr retrospective tax from Cairn Energy of UK

Plc said on Monday the Indian income tax (I-T) department had issued an order to Ltd, directing it to pay the government any sums that were due to the Edinburgh-based company. 

Cairn said owed it $104 million, including historical dividends of $53 million and a further dividend of $51 million after the merger of Cairn India and

The June 16 direction comes even as a tribunal on June 9 issued an order memorialising numerous confirmations from the Indian government that the dividends were no longer restricted and authorising the order be provided to Cairn India, now part of

said it had advised banks, holding approximately Rs 666 crore in the dividend account to transfer the amount to the I-T authorities. “It may be recalled that the dividends due to Plc for the last three years were lying in an unpaid dividend account as initially they were subject to an attachment order u/s 281B by the Tax Department and were not available for use by Cairn (now Ltd),” said.

In March, Cairn announced it had received confirmation from the Indian government through an tribunal that dividends of $53 million due from Cairn India were no longer restricted and it requested immediate release of that sum.

“Notwithstanding this action by the GoI, proceedings are progressing in respect of the group’s claim under the UK-India Bilateral Investment Treaty. Cairn is seeking full restitution for treaty breaches resulting from the expropriation of its investment in India in 2014, the attempts to enforce measures and the failure to treat the company and its investments fairly and equitably,” Cairn said in a statement.  

The company said it had a “high level of confidence” in its case under the treaty in addition to resolution of the dispute. Its claim seeks damages equal to the value of the group’s residual shareholding in Cairn India at the time it was attached (approximately $1 billion).

The company commenced against Indian tax authorities in 2015. The seat of the arbitration is The Hague in the Netherlands and final hearings for the tribunal are scheduled for January 2018.

Cairn UK Holdings Limited (“CUHL”), a direct subsidiary of Cairn Energy, received an assessment order from the Indian tax authorities relating to the intra-group restructuring undertaken in 2006 prior to the IPO of Cairn India. 

It cited a retrospective amendment to the Indian tax law introduced in 2012 and claimed Rs 10,200 crore (approximately $1.5 billion) plus interest backdated to 2007 totalling Rs 18,800 crore (approximately $2.8 billion). The total assets of CUHL comprise the group's 9.8 per cent shareholding in Cairn, which has now been converted to a shareholding in and any recovery by the Indian authorities will be limited to such assets, according to

Dollar

graph

 

image
Business Standard
177 22