Donald Trump’s economic policies are phenomenal: Anil Agarwal
Vedanta’s Anil Agarwal on a pending tax dispute with India after the acquisition of Cairn India Ltd, and the fallout of Donald Trump’s policies and Brexit on his areas of business
Anil Agarwal, group chairman, Vedanta Resources Plc has been in the news after announcing plans to buy around $2.4 billion of Anglo American Plc shares on the exchanges after his merger proposal was rebuffed last year.
In an interview on the sidelines of a conference on natural resources organised by Network 18 and Confederation of Indian Industry, Agarwal hinted at a larger play after acquiring around 13% of Anglo American’s stock, which will make him the second-largest shareholder after South Africa’s Public Investment Corp.
Agarwal also spoke about a pending tax dispute with the Indian government after the acquisition of Cairn India Ltd by London-listed Vedanta Resources, which included Rs10,200 crore as principal tax dues and the fallout of Donald Trump’s policies and Brexit on his areas of business. Edited excerpts:
How has your experience been with this government, given that Cairn Energy is still grappling with tax issues, with the Income Tax Appellate Tribunal passing an order for a payment of Rs10,247 crore as tax?
The tax issue is not from this (National Democratic Alliance) government. It was imposed by the last (United Progressive Alliance) government. This government had stated during the time of elections that this was wrong and they will remove it. They are also trying their level best. They have been talking to us day and night. Till now, no solution has been found. Whenever we go outside, the most critical question that gets asked overseas is the issue of retrospective tax. Everyone feels that the last government did it and it can be done again. However, this government has repeatedly said, and everyone feels that this government is very stable, and it is very determined that it would not do anything like that. But till the time this issue is not resolved, it is very important to resolve it and the government is working in that direction. If they accelerate it a bit, it will become better.
According to you, where is the issue stuck?
These are government policies. They will have to solve it in a simple way. Big things have been done. It has gone to the courts. For how long will it go on, no one knows. It will bring bad repute globally. I don’t have an idea but whenever I go, I get a sympathetic view (from the government).
What does the government tell you?
They tell me that this thing which has been done is not a right thing. We are with this issue. We have waived off the interest and will do whatever which is required... No timeline has been committed.
What is your big play in Anglo American Plc?
I am a Bihari, can’t speak much (laughs). The only thing ‘right now’ is that I am an investor.
You are saying ‘right now.’ What happens going forward?
We are an investor right now. Can’t say anything beyond this.
You are not denying that you will buy more stake in Anglo-American?
As of today, I can’t speak about more than what I have already said.
You have said that you will persuade Anglo American to bring their businesses to India. But since you have bought the stake on behalf of the holding company, which is Volcan, you will still do business with them. Or, will they operate independently?
That we will see. Whatever works out keeping in mind the governance.
Will there be a separate entity?
That, we will tell you later.
What are your green energy plans?
We produce wind power... around 500MW. There has been a shift in the solar business. It used to be Rs6 per unit and now it has come down to below Rs2 per unit. That is definitely an advantage. So, we are studying it very seriously and will take the clean energy plans forward.
We have two plans. We will produce a lot of gas in Rajasthan...We are already producing wind energy. And we are definitely looking into solar and how do we do a strategic investment in solar.
But, we will not be producing solar cells. We will be producing solar power, which will be used for our own purpose because we consume over 10,000MW.
What is the update on Cairn India’s merger with Vedanta?
It is almost done. I think it should be done in 2-4 days.
Any impact of Donald Trump’s policies and Brexit on your areas of business?
From a business perspective, these are positive for us. England has its own orbit. In my opinion, England may fall behind in the race for a brief time but England will be very stable. I live there and I am very confident that England will prosper.
Donald Trump’s economic policies are phenomenal. He himself is a businessman and the way he spoke about (Prime Minister Narendra) Modi’s efforts to reduce the involvement of bureaucracy and red tapism... He himself is doing that.
But, he is stuck in a logjam in the Republican controlled Congress...
I agree but intentions are like this. I can’t comment on him. He is such a big man. I am a very optimistic person. I believe that he will correct himself. He has no other intention except to take his country forward.
We are talking about resurgence in resources. How do you see this playing out? What is your outlook?
It is going to be long-term. India is just at the tip of the iceberg. If India does not improve its natural resources, it will be a complete dumping ground for the world to unload oil and gas, gold, silver, fertilizer and this has to change.
India has every resource and human resource as well. So, this is a golden opportunity for the world to come and set up the plant. And this is the first time that I am seeing awareness in the government where they have started to believe that we have natural resources.