MUMBAI : The Securities Appellate Tribunal (SAT) on Thursday issued a stay on a Securities and Exchange Board of India order against Vedanta Ltd, which had directed the company to pay ₹77 crore in interest for a delayed dividend payment to Cairn UK Holdings.
The tribunal, however, asked Vedanta to deposit 50% of the interest amount into an interest-bearing account for Cairn UK.
“We are of the view that at this stage the balance of convenience lies with the appellants (Vedanta). Stay is granted on the effect and operation of the impugned order pending disposal of the appeal on the condition that Vedanta Ltd deposits 50% of interest determined to be payable to Cairn UK,” the bench led by Meera Swarup said in the order.
The tribunal clarified that the remaining amount should not be collected during the pendency of the appeal. Should Vedanta fail to deposit the 50%, the stay will be automatically revoked.
The case will next come up for hearing on 18 June.
On 12 March, Sebi, in addition to demanding the interest payment, barred nine of Vedanta’s executive and non-executive directors from accessing the capital markets due to alleged violations concerning the delayed dividend payment to Cairn UK Holdings. Among the executives were Anil Agarwal’s family members, Navin Agarwal and Priya Agarwal.
The order was based on a complaint from Cairn UK Holdings, which said that it had not received a dividend of ₹340.64 crore for its share in the company.
Vedanta and its directors had moved the tribunal on Wednesday against Sebi’s order.
Janak Dwarkadas, representing Vedanta, argued that the order was baseless and did not acknowledge that the dividend for Cairn UK Holdings was withheld due to restrictions from the Income Tax Department, not mismanagement by Vedanta.
The funds were kept in a separate account for unpaid dividends, he said.
Sebi, on the other hand, contended that Vedanta was aware there were no restrictions on disbursing the outstanding dividend to Cairn UK from 31 March 2016 and said the company had unjustifiably withheld the funds.
In 2011, Vedanta acquired a majority stake in Cairn India Ltd from Cairn Energy PLC, with Cairn maintaining a minority interest. Cairn India was later integrated into Vedanta Ltd, a publicly listed company.
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Published: 21 Mar 2024, 05:44 PM IST