This 2019 finding was challenged by CUHL before the Supreme Court. In 2022, the Supreme Court ordered SEBI to initiate an enquiry and complete the same within a specific time frame (six months), although the time period was later extended on SEBI’s request.
Upon conducting this enquiry, SEBI has now rejected an argument by Vedanta (formerly Cairn India) that it could not pay the dividend due to CUHL earlier because of uncertainty created by a tax demand.
SEBI pointed out that the 2014 attachment order (of the income tax authorities) relied on by Vedanta to defend its conduct had expired by the end of March 2016. There was no embargo on Vedanta to prevent it from paying CUHL its dividend after March 31, 2016, it found.
“ITD letter dated March 31, 2016 did not restrict payment of dividend. In view thereof, I find that, after March 31, 2016 till June 16, 2017, there was no cloud over entitlement of CUHL to receive dividend. Therefore, I reject contention of the Noticee(s) that CIL withheld payment of dividend after March 31, 2016 due to uncertainty regarding entitlement of CUHL to receive dividend,” the SEBI order said.
Source: Barandbench
