Cairn Accepts $1 Billion Refund Offer, To Drop Cases Against India Within Days

The United Kingdom-based Cairn Energy has said that it will drop litigations to seize Indian properties in other countries within a couple of days of getting a $1 billion refund resulting from the government's scrapping of the retrospective tax law last month.

Cairn CEO Simon Thomson was quoted by PTI as saying that the offer to return money seized to enforce retrospective tax demand in place of dropping all litigations against the government was "acceptable to us".

He added that the firm would drop cases to seize diplomatic apartments in Paris and Air India aeroplanes in the US in "a matter of a couple of days" after the refund.

Thomson also said that Cairn's shareholders agree with accepting the offer and moving on.

"Some of our core shareholders likes BlackRock and Franklin Templeton agree (to this). Our view is supported by our core shareholders (that) on balance it is better to accept and move on and be pragmatic. Rather than continue with something negative for all parties which could last for many years," Thomson was quoted as saying.

Cairn accepting the offer for tax dispute settlement will be a big win for the Modi government as it had enacted a new legislation last month to drop Rs 1.1 lakh crore in outstanding claims against several multinational firms, including Vodafone, Sanofi, SABMiller and Cairn.

About Rs 8,100 crore collected from companies under the scrapped tax provision are to be refunded if the firms agreed to drop outstanding litigation, including claims for interest and penalties. Of this, Rs 7,900 crore is due only to Cairn, reports Business Standard.

"Once we get to final resolution, part of that resolution is us dropping everything in terms of litigation. We can do that within a very short period of time, just a matter of a couple of days or something," Thomson said.

"So we are preparing on the basis of getting this resolution quickly, all these cases being dropped, and putting all this behind," he added.