Cairn Energy plc has sought shareholders approval to sell its 9.65 per cent stake in Cairn India after restrictions imposed by the Income-Tax Department are lifted.
The I-T Department had earlier this year restrained Cairn from selling the stake over alleged tax evasion on Rs 24,500 crore of capital gains made when it transfered its India assets to a new company, Cairn India, in 2006-07.
Cairn Energy had said in a regulatory filing after the annual general meeting on May 16, 2013, that shareholders had authorised the board to dispose of all or part of the company's residual interest in Cairn India.
“As previously announced, Cairn has at present been restricted by the Indian Income-Tax Department from selling its shares in Cairn India.“However, Cairn believes it is appropriate to retain the flexibility to realise shareholder value from its residual interest in Cairn India in the event that the selling restriction is removed and is therefore seeking to renew the Residual Interest Disposal Authority,” it said.
Its AGM is scheduled to be held in Edinburgh on May 15. Cairn sought shareholder approval to sell the residual stake through on-market transactions, including participation in any share buy-back by Cairn India.
At the current price, the residual stake of 9.65 per cent will fetch Cairn Energy over Rs 6,665.35 crore. Cairn Energy previously operated the eastern offshore Ravva oil and gas field and discovered significant natural gas reserves in a block in the Krishna Godavari basin before striking oil in India's largest onland field in Rajasthan in January 2004.
Two years later in 2006, it transferred its India business from subsidiaries incorporated in places like Jersey, a tax haven, to the newly incorporated Cairn India.