Mumbai: The Securities Appellate Tribunal (SAT) has directed regulator Sebi to probe Cairn India for alleged violation of the Companies Act.
In the order dated July 19, SAT directed the regulator to inquire into the alleged violation which was pointed out by Cairn UK Holdings.
"... if the company, namely, Cairn India had violated the provisions of the Companies Act in not releasing the dividend when there was no embargo upon it, it is SEBI's duty to inquire into the alleged violation and if it exists take action against the said company and, if necessary, under Section 124 of the Companies Act," SAT said in its order.
"This aspect has not been considered by SEBI."
Cairn UK Holdings had earlier approached Sebi in 2017 in connection with non-payment of dividend which was due to it by Cairn India amounting to Rs 340.64 crore.
On its part, Sebi by the impugned order disposed of the complaint on the ground that the unpaid dividend of over Rs 660.63 crore was handed over by Cairn India to the income tax authorities and, therefore, it would not be appropriate for the regulator to take any further action.
Consequently, the appellant moved SAT and in its complaint said that Cairn India be directed to pay the dividend to the appellant along with interest at the rate of 18 per cent p.a. and to initiate proceedings under "Section 127 of the Companies Act against every director of the Cairn India who were knowingly a party to the non-payment of the said dividend".