Britain's Cairn Energy has secured a French court order to seize 20 Indian govt properties to recover arbitration award, it is learnt.
India is believed to have challenged in a court in The Hague an arbitration tribunal verdict that overturned its demand for Rs 10,247 crore in back taxes from Cairn Energy Plc -- the second time in three months that it has refused to accept an international award against retrospective tax.
Faced with prospect of its assets across the globe being seized just like Pakistan and Venezuela, the government decided to scrap retrospective taxation but the international embarrassment could have been avoided had 'attached' shares of Britain's Cairn Energy Plc not been sold, according to tax and legal experts. On Thursday, the government introduced a Bill in Parliament to scrap the tax rule that gave the tax department power to go 50 years back and slap capital gains levies wherever ownership had changed hands overseas but business assets were in India. The 2012 legislation was used to levy a cumulative of Rs 1.10 lakh crore of tax on 17 entities, including UK telecom giant Vodafone, but substantial punitive action was taken only in the case of Cairn.
Cairn, which is sitting on a cash pile of about $3 billion, in a statement said its board has approved buying 17.09 crore shares or 8.9 per cent of the total shareholding, from open market at no more than Rs 335 apiece.
Cairn has already taken steps to have the arbitration award recognised in nine major jurisdictions such as the US, UK, France, the Netherlands, Singapore and Canada's Quebec province, where Indian sovereign assets have been identified. It hasn't said what it might go after but assets could include Air India's planes, vessels belonging to the Shipping Corporation of India and property owned by state banks.
UK-based Cairn Energy PLC on Tuesday said it will drop litigations to seize Indian properties in countries ranging from France to the US, within a couple of days of getting a USD 1 billion refund resulting from the scrapping of a retrospective tax law.
After Air India, Britain's Cairn Energy PLC plans to target assets of state-owned firms and banks in countries from the US to Singapore as it looks to ramp up efforts to recover the amount due from the Indian government after winning an arbitration against levy of retrospective taxes. A lawyer representing the company said Cairn will bring lawsuits in several countries to make state-owned firms liable to pay the $1.2 billion plus interest and penalties that are due from the Indian government. Last month, Cairn brought a lawsuit in the US District Court for the Southern District of New York pleading that Air India is controlled by the Indian government so much that they are 'alter egos' and the airline should be held liable for the arbitration award.
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Cairn India said the company board has accepted Elango's resignation.
Courts in five countries including the US and the UK have given recognition to an arbitration award that asked India to return $1.4 billion to Cairn Energy plc - a step that now opens the possibility of the British firm seizing Indian assets in those countries if New Delhi does not pay, sources said. Cairn Energy had moved courts in nine countries to enforce its $1.4 billion arbitral award against India, which the company won after a dispute with the country's revenue authority over a retroactively applied capital gains tax. Of these, the December 21 award from a three-member tribunal at the Permanent Court of Arbitration in the Netherlands has been recognised and confirmed by courts in the US, the UK, Netherlands, Canada and France, three people with knowledge of the matter said.
A senior company executive said the company waited for seven years for the verdict and its shareholders needed to know when it would be concluded.
Cairn joins a slew of multinational firms including Vodafone Group Plc and Royal Dutch Shell Plc that have been slapped with retrospective tax demands by Indian authorities.
Cairn said it had initiated arbitration.
Cairn files notice against India in $1.6 billion tax dispute.
Vodafone is facing tax liability over its $11 billion acquisition of a 67 per cent stake in the mobile-phone business owned by Hutchison Whampoa in 2007.
It is the second firm to have received retrospective tax notice this year after Vodafone Group.
The exploration company will buy back shares from January 23 and extinguish them.
The Indian State does not believe in the rule of law. It does not even recognise the need to follow treaties that it itself signed. And so it is refusing to shell out to Cairn; and, as a consequence, has brought on the Paris humiliation, notes Mihir S Sharma.
Database to contain taxable financial transactions and history of any tax-paying individual.
The company has not been able to sell its 9.8% stake in Cairn India
Participants are eagerly waiting for the key macrodata -- IIP and CPI numbers due to be released later today.
Financials were among the top losers along with Sun Pharma and index heavyweight Reliance Industries
Finance Minister Arun Jaitley, in his Budget speech on Monday, announced a new dispute resolution mechanism for such companies who are in confrontation with the taxman's action.
Investors sought to book profits at attractive valuations after recent run up in last few trading sessions.
Sensex lacklustre, bluechips in focus.
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