There seems to be more trouble brewing for Vedanta Resources owner Anil Agarwal. His much-discussed R4.3 lakh crore takeover of Cairn India is unlikely to get the Indian government’s approval. The deal may ultimately fall through.
The government is unhappy with the manner in which the
deal was finalized. It learnt of the buyout — involving 11 oil and gas properties in India that ultimately are a natural resource and belong to the Centre — through a public announcement the two firms made on August 16, after the deal was done.
"There are serious issues of conduct and corporate governance involved. The government is unlikely to let Vedanta own India’s largest onshore oilfield at Barmer in Rajasthan, which produces 25 per cent of the country’s oil, simply by
buying out Cairn India,” a government official said.
Petroleum secretary S Sundareshan has written to Cairn Energy’s global CEO Bill Gammell saying the deal needs government approval. Indian oil companies are also considering a joint counter-offer to Cairn.
On Tuesday, London-based Agarwal met Congress chief Sonia Gandhi and spoke to petroleum minister Murli Deora.