Cairn to drop all cases against India 'within days' after receiving $1 billion refund

Cairn Energy CEO Simon Thomson on Tuesday said that the UK-based firm will drop all cases to seize Indian properties in foreign countries within days after receiving a USD 1 billion refund resulting from the scrapping of controversial retrospective tax law.

Thomson termed Centre's decision "bold" to pass legislation to axe a 2012 policy that gave the Income Tax department authority to go back 50 years and impose capital gain levies wherever ownership had changed overseas but business assets were in India.

Will drop all cases to seize Indian assets overseas: Cairn

In an interview with PTI, Cairn CEO Simon Thomson said the offer to refund money seized to impose retrospective tax demand in lieu of dropping all litigations against the government "is acceptable to us." He said that the firm will drop all litigations to seize diplomatic residences in Paris and Air India aircraft in the US in "a couple of days" following the refund.

"Some of our core shareholders likes BlackRock and Franklin Templeton agree (to this). Our view is supported by our core shareholders (that) on balance it is better to accept and move on and be pragmatic. Rather than continue with something negative for all parties which could last for many years," he said.

The Centre last month enacted new legislation to scrap the controversial retrospective tax, dropping Rs 1.1 lakh crore in outstanding claims against multinational firms such as pharmaceuticals company Sanofi, telecom group Vodaphone, Cairn and brewer SABMiller, now owned by AB InBev.

Read: What Is Retrospective Tax? Here's Why Govt's Latest Move Brings Relief To Cairn, Vodafone

Around Rs 8,100 crore collected from the firms under the retrospective tax law are yet to be returned if the companies agreed to drop outstanding cases, including penalties and claims for interest. Of this, mammoth Rs 7,900 crore is due to Cairn. 

"Everything will be dropped. There will be no more litigation, that will be it. It will clear the matter up," he said.

In a half-yearly report, Cairn Energy said that it will return about USD 700 million to "shareholders via special dividend and buyback" of the USD 1.06 billion they were supposed to get from the Indian government. When asked about the company's return to India, Thomson said, "If there is the right opportunity, why not."

(With Inputs from PTI)

Image Credits: PTI