BackCairn India distances itself from Cairn Energy tax dispute
The company said that Cairn UK Holdings is presently not part of Cairn India Ltd
Premium(Cairn India has not received any tax notice, the company said in a filing to the BSE. )
Mumbai: Cairn India Ltd, a unit of London-listed Vedanta Resources Plc, on Thursday distanced itself from the ongoing tax dispute involving Cairn Energy Plc, saying that Cairn UK Holdings is presently not part of Cairn India Ltd. Cairn India has not received any tax notice, the company added in a filing to the BSE.
“From media reports we understand that the aforesaid tax demand has been made by the Income Tax Department on Cairn UK Holdings Limited (CUHL). We would like to clarify that CUHL is incorporated in UK and is presently not part of Cairn India Limited. As no demand has yet been received by Cairn India Limited," Cairn India said.
The Indian tax department on 10 March sent a draft assessment order to Cairn Energy Plc in respect of financial year 2006-2007 to the amount of $1.6 billion plus any applicable interest and penalties.
Following the draft order, Cairn Energy Plc said it has instructed its counsel to file a notice of dispute.
The dispute notice was filed under the terms of a UK-India investment treaty, meaning the Indian government and Cairn will start negotiations to find a resolution to the dispute, Cairn said. If no agreement is reached, an international arbitration panel will rule, it said in a statement on Tuesday.
The tax dispute is in relation to a transaction that Cairn Energy Plc undertook as a part of a group reorganization in order to enable the public listing of Cairn India Ltd in 2007.
At 2.56pm, Cairn India Ltd rose 3.8% to ₹ 232.15 on BSE while India’s benchmark Sensex was trading at 28,892.83, up 0.82% from previous close.
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