CAIRN DIRECTORS SEEK US INTERVENTION IN TAX DISPUTE

Directors of UK-based Cairn Energy have raised the issue of the retrospective tax with senior officials in the US administration, ahead of Prime Minister Narendra Modi’s visit to the US. The company is involved in a ~10,247-crore tax dispute with the Indian government. The stakeholders in the company have pleaded that US officials raise the issue with Modi.

Directors of UK-based Cairn Energy Plc have raised the issue of the retrospective tax on them with senior officials in the American administration, ahead of Prime Minister Narendra Modi’s visit to the US.

The company is involved in a ~10,247-crore tax dispute with the Indian government. The stakeholders in the company have pleaded that US officials raise the issue with Modi when he comes to the US for a two-day visit starting this weekend.

Todd M Hunt, president of Atropos Exploration Company, and a non-executive director on Cairn Energy Plc’s board, has written to the US House of Representatives, secretary of commerce Wilbur Ross and secretary of state Rex W Tillerson. India’s retrospective tax legislation, his letters say, are having “a severe impact on Cairn’s shareholders and India’s image as an international investment destination”.

Los Angeles-based Hotchkis & Wiley that has an erstwhile Cairn India, which investment in Cairn Energy now stands merged with has also written to the Vedanta. American administration. Vedanta owed $104 million, Saying that unless the retrospective including historical dividends amendment issue of $53 mn and a further was resolved, “the lack of dividend of $51 mn. clarity in the (Indian) government’s Cairn Energy is locked in approach to taxation an arbitration with the risks is undoing good Indian government. It is work in other seeking full restitution areas of the econ- for its omy and will con- charges of treaty tinue to damage breaches resulting India’s reputation from the among investors”. expropriation of

“Whilst in its investment in opposition and in India in 2014, the early years following attempts to his election, enforce retrospective Prime tax Minister Modi measures and promised to end the previous failure to treat the company government’s stance and and its investments fairly replace it with a non-adversarial and equitably. and conducive tax environment. In addition to resolution Regrettably, this of the retrospective tax dispute, has not yet happened,” Hunt its claim seeks damages wrote in his letter to Ross. equal to the value of the

The income tax authorities group’s residual shareholding here have blocked earlier in Cairn India at the time dividend payment dues it was attached (approximately from Vedanta (which had $1 billion). The company bought Cairn’s erstwhile commenced international Indian arm) to Cairn Energy arbitration Plc. And, are mulling over proceedings against Indian the sale of Cairn’s holding in tax authorities in 2015.

Directors of Cairn Energy Plc have raised the issue of the retrospective tax on them with senior officials in the American administration, ahead of Modi’s visit to the US