Cairn: ministry talks conditional nod
Equipped with the opinion from the law ministry, the petroleum and natural gas ministry will shortly move the Cabinet to accord a conditional approval to the $9.6 billion (Rs 43,500 crore) Cairn-Vedanta deal, currently stuck in an official logjam over regulatory approvals from the petroleum ministry and the Securities and Exchange Board of India.business Updated: Feb 18, 2011 21:36 IST
Equipped with the opinion from the law ministry, the petroleum and natural gas ministry will shortly move the Cabinet to accord a conditional approval to the $9.6 billion (Rs 43,500 crore) Cairn-Vedanta deal, currently stuck in an official logjam over regulatory approvals from the petroleum ministry and the Securities and Exchange Board of India (SEBI).
“We have received the law ministry’s opinion,” confirmed a senior petroleum ministry official. The possibility of the royalty issue being referred to an inter-ministerial committee comprising senior representatives from ministry of finance, corporate affairs, petroleum and law is also being discussed, he said.
“Royalty issue is a complex one and we are currently studying the law ministry’s opinion before it can be incorporated in the cabinet note,” the official said, adding that a decision on the royalty issue may take some more time.
The petroleum ministry had sought the law ministry’s endorsement over the11 pre-conditions laid by it for clearing the Cairn-Vedanta corporate deal that involves sale of majority shareholding of Cairn Energy Plc in its Indian subsidiary (Cairn India) to London-listed Vedanta Resources.
Officials said the legal arm of the government is in broad agreement with the petroleum ministry on most of the conditions except the one concerning a company’s right over litigation. “The law ministry has upheld a company’s (Cairn in this case) rights over arbitration and legal recourse on any dispute that arises between the stakeholders,” he said.
After his meeting with chairman of Cairn Energy Plc on Friday, petroleum minister Jaipal S Reddy maintained that the “Cabinet will look at this issue within a time-frame of three weeks.”
As reported by HT first on February 16, Reddy also confirmed that British Prime Minister David Cameron had written to India on the issue. Cameron “wants India to ensure early clearance of the deal”.
Commenting on the February 20 deadline set by Cairn Plc, Reddy said there was no need to worry about meeting deadlines. “They (Cairn) are worried about their timeframe. I told them no need to worry.”