The Securities Appellate Tribunal (SAT) quashed a Securities and Exchange Board of India (SEBI) order in a matter pertaining to non-payment of dividend to Cairn UK Holdings Ltd by Cairn India Ltd, a subsidiary of Vedanta Ltd.

In 2017, Cairn UK Holdings had filed a complaint on SEBI’s SCORES platform against non-payment of dividend worth more than Rs 340.64 crore by Cairn India, calling it a violation of Section 127 of the Companies Act. SEBI disposed of the complaint, saying the unpaid dividend was handed over to the income tax authorities and, thus, it would not be appropriate for SEBI to take any action. Cairn UK challenged the rejection of its complaint in SAT, which instructed SEBI to re-examine the matter in 2019. After re-examining the matter, SEBI dismissed Cairn UK’s complaint, terming as unfounded its allegations that Cairn India violated Section 127 of the Companies Act and Regulation 4(2)(c) of the LODR Regulations. SEBI also said that despite the absence of a categorical directive from the income tax department to withhold dividend payments after the provisional attachment period had expired, it was unclear whether or not the dividend may be released to the appellant.

Click here to read the detailed SAT order