A day after Anil Agarwal’s Vedanta Group announced its intent to merge Cairn India into Vedanta Ltd, the top management was found actively wooing the minority investors as well as top gvernment officials.
Anil Agarwal, Chairman, Vedanta Resources Plc, met the Finance Minister Arun Jaitley and the Minister of State (Independent Charge) Petroleum & Natural Gas, Dharmendra Pradhan, in Delhi, while his CEO Tom Albanese met the minority shareholders such as LIC in Mumbai.
“The retrospective tax demand was discussed. From our point of view there was no requirement of withholding tax at the time of the Cairn deal. However, the matter is sub judice now, so we have left it at that,” said Agarwal after his meeting. The Income Tax department has sent four distinct notices to Cairn Energy Plc and Cairn India seeking ₹20,495 crore.
The tax demand is for Cairn India failing to deduct withholding tax on alleged capital gains made by former promoter Cairn Energy Plc.
He added that the Finance Minister was also apprised of the merger. “We had discussed the merger earlier also, but I wanted to apprise him about the development,” said Agarwal.
To conclude the transaction by 2016, the group will require shareholders nod of both Vedanta Ltd and Cairn India.
Minority shareholders will hold the key as they have the right to vote.
Vedanta is also keeping Ministry for Petroleum & Natural Gas in the loop of all developments, a source said.
Clearances requiredThe group will also require the nod from jurisdictional High Courts where the registered offices of both the companies are situated, market regulator SEBI and stock exchanges.
The deal may also need Foreign Investment Promotion Board’s nod.