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The Securities and Exchange Board of India (Sebi) has passed an order directing Vedanta Limited to pay Rs 78 crore to Cairn UK Holdings for the delay in payment of dividends.

The dispute dates back to 2011 when Vedanta acquired Cairn India. As part of the deal, Cairn India had declared a dividend of Rs 3,120 crore, of which Cairn UK Holdings was entitled to receive Rs 702 crore. However, Vedanta did not make the payment to Cairn UK Holdings promptly.

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The matter was brought to Sebi’s attention in 2014 when Cairn UK Holdings filed a complaint alleging that Vedanta had not paid the dividend due to it. Sebi conducted an investigation and found that Vedanta had indeed delayed the payment to Cairn UK Holdings.

In its order, Sebi noted that Vedanta’s actions violated the listing agreement, which requires companies to make timely payment of dividends to their shareholders. Sebi directed Vedanta to pay the outstanding amount of Rs 78 crore to Cairn UK Holdings within 45 days.

Vedanta has stated that it will comply with Sebi’s order and make the payment to Cairn UK Holdings. The company has also assured that it will take necessary steps to prevent a recurrence of such delays in the future.

The order by Sebi underscores the importance of companies fulfilling their obligations to shareholders on time. Failure to do so not only violates regulatory requirements but also undermines investor confidence in the company. Companies need to uphold good corporate governance practices and ensure that all stakeholders are treated fairly and equitably.

As Vedanta prepares to make the payment to Cairn UK Holdings, it would do well to learn from this incident and improve its processes to avoid similar violations in the future. This case serves as a reminder to all companies of the importance of adhering to regulatory requirements and maintaining transparency and accountability in their dealings with stakeholders.

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