Bhushan PIL in SC calls for cancelling Cairn-Vedanta deal

The indefatigable Prashant Bhushan has filed yet another PIL to cancel the Cairn-Vedanta deal

R Jagannathan February 27, 2012 19:47:18 IST
Bhushan PIL in SC calls for cancelling Cairn-Vedanta deal

Even as the Vedanta Group of Anil Agarwal has announced a restructuring of group assets under which Sesa Goa and Sterlite will be merged and the group's holdings in Cairn India transferred to the new merged entity, a new threat is headed its way.

Prashant Bhushan of the Centre for Public Interest Litigation (CPIL)) has lobbed a new case in the Supreme Court on Monday asking it to cancel the government of India's approval for the Cairn Energy-Vedanta deal on the ground that the country would be losing over Rs 1,00,000 crore in the process.

Bhushan PIL in SC calls for cancelling CairnVedanta deal

Agencies

The PIL says that Oil & Natural Gas Corporation (ONGC), as 30 percent owner of Cairn India, had the right of first refusal (ROFR) in case Cairn Energy wanted to sell its 70 percent stake in the Indian company, which struck oil in Rajasthan.

But instead of allowing ONGC to exercise its ROFR, the government approved the Carin-Vedanta deal and merely asked Cairn India to take over the royalty payments that ONGC had been shouldering so far.

The PIL says that if ONGC had acquired a 41 percent additional stake from Cairn Energy, as it was entitled to under ROFR, it would have gained more. But by not exercising the ROFR, it lost out on more than Rs 1,00,000 crore worth of oil.

The loss calculations are based on Cairn's Rajasthan oil selling at around $100 a barrel and on the basis of a total of 1.4 billion barrels of recoverable oil from the field.

See the PIL text here:

PDFOnline(1)

The PIL asks for the following decisions from the court:

• Cancellation of the government's approval for the deal

• Direction to ONGC to exercise its ROFR on same terms as offered to Vedanta

• Direction to the Central Bureau of Investigation (CBI) to investigate why ONGC did not exercise its legal rights

• Direction to CBI to investigate why ONCG was made liable for whole of royalty when it owned only 30 percent of the Rajasthan field

• Direction to the CBI to investigate how Cairn was given extension of time to complete its Rajasthan explorations

• Direction to the Comptroller and Auditor General to calculatethe losses incurred by ONGC by paying 100 percent of royalty before the Cairn-Vedanta deal

Quite clearly, Vedanta's headaches on the Cairn deal are far from over.

Updated Date:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

FA Cup: Leeds United stunned by Crawley Town; Chelsea, Manchester City advance
Sports

FA Cup: Leeds United stunned by Crawley Town; Chelsea, Manchester City advance

Since the Football League's fourth tier was added in 1958, this was only the second time a top-flight side had lost by three or more goals to opposition from that level in the FA Cup.

The M Night Shyamalan interview | 'Ramifications of pandemic coincide with the minimalistic way I like to tell my stories'
Entertainment

The M Night Shyamalan interview | 'Ramifications of pandemic coincide with the minimalistic way I like to tell my stories'

M Night Shyamalan says the pandemic protocols have only facilitated the way he likes to tell stories like Servant Season 2 on Apple TV+ — singular setting, limited cast, and deliberate quietness.

Sharing official secrets with journalists criminal act, says Rahul Gandhi on purported Arnab Goswami chats
India

Sharing official secrets with journalists criminal act, says Rahul Gandhi on purported Arnab Goswami chats

Gandhi was referring to allegations that the 'leaked' chats showed Goswami was reportedly privy to the Balakot air strikes beforehand