Companies

Cairn to send postal ballot notice within 10 days

Richa Mishra New Delhi | Updated on March 12, 2018 Published on July 28, 2011

Pushed to the wall, Cairn India will reach out to its shareholders in the next 10 days to consider the riders set by the Government for Cairn Energy-Vedanta Resources deal.

Sources privy to the development told Business Line that in next 8-10 days, a communication would be sent to the shareholders for a postal ballot to consider whether to accept or not the conditions set by the Government.

The Government has asked Cairn India to implement the decision in a month from July 26. But, this is not possible. Mr Rahul Dhir, Managing Director and Chief Executive Officer, Cairn India, said, “We will clarify to the Government.” The postal ballot consent of joint venture partner — ONGC — in pre-NELP fields, and Home Ministry's security clearance of Vedanta Resources, will require some time, he added.

On June 30 the Government approved the proposal with certain riders — the royalty burden for Rajasthan crude oil was to be shared by all stakeholders and Cairn should withdraw all arbitration cases. Cairn India board has been strongly opposing this decision.

The low morale of Cairn India was evident after the July 26 board meeting, when Mr Dhir, at an analyst call, said, “The matter has now gone out of the Board's hand. Board's view is no longer relevant…”

He said the company got the Government's formal communication on July 26. This was just when the Board meeting was on in Edinburgh. The company also got a requisition from the majority shareholder Cairn Energy to call for an extra-ordinary general meeting to consider the issue.

Published on July 28, 2011
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