Vedanta Shares Drop After Sebi Asks Company To Pay Rs 77.6 Crore To Cairn For Delayed Dividends

The regulator also barred Vedanta directors, including vice-chairman Navin Agarwal, from India's securities markets for two months.

Anil Agarwal-led Vedanta shares dropped by 3.57 per cent to Rs 260.65 on the NSE after the SEBI asked Vedanta to pay Rs 77.6 Crore to Cairn UK Holdings for a delay in paying dividends.

SEBI said Vedanta must make the payment within 45 days or face further action. The regulator also barred Vedanta directors, including vice-chairman Navin Agarwal, from India’s securities markets for two months.

The regulator in its order said that Vedanta, formerly known as Cairn India, had violated Indian laws by withholding dividends that should have been paid to the British company between January 2014 and June 2017.

Vedanta On SEBI’s Order

Vedanta, in an exchange filing on March 12, said,” We wish to inform you that the Securities and Exchange Board of India (“SEBI”) has issued an order dated March 12, 2024, in the matter of non-payment of dividend to Cairn UK Holdings Limited (now known as Capricorn UK Holdings Limited) by Cairn India Limited (now known as Vedanta Limited).”

Vedanta said it will have no major financial impact on the company due to SEBI’s order. It added that the company is in process of taking appropriate legal steps in respect of the same.

It stated the reason for delaying the dividends and said that it failed to pay dividends because of asset restrictions related to a demand by India’s tax department. However, the restrictions expired in March 2016.

Cairn UK had lodged a complaint with SEBI in 2017 and had also given several reminders and despite the lifting of the restrictions, the dividends were not paid until June 2017 and that Vedanta was liable to pay interest on the delayed dividends.

SEBI said interest should be paid to “compensate for the time value of money that … (Cairn UK) was unlawfully deprived of”.

(With Inputs From Reuters)