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PIL challenges Cairn-Vedanta deal in SC

A petition was moved in SC challenging the validity of the $8.5 bn Cairn-Vedanta deal

Written by Agencies | New Delhi | Published: February 27, 2012 7:53:39 pm

A petition was today moved in Supreme Court challenging the validity of the USD 8.5 billion Cairn-Vedanta deal and seeking CBI probe into the reasons for ONGC and Government in “not asserting” their legal rights in t in the issue.

The Public Interest Litigation (PIL) also sought audit by the Comptroller and Auditor General (CAG) into several aspects of the deal and government approvals for the acquisition of the majority stake of Cairn India by Anil Agarwal’s Vedanta Resources on the ground that the offer in this regard should have gone first to the state-owned PSU ONGC.

The PIL,filed by a Bangalore resident Arun Kumar Agarwal stated that ONGC in an agreement with Cairn group had a clause that in case the Cairn Group wanted to sell its shares in Cairn India it would first offer the same to the ONGC.

If the ONGC refused to buy the stake,then only Cairn can sell it to another party and hence ONGC had the right of first refusal (ROFR).

It alleged that the decision on the deal has been made on “extraneous considerations” and without taking into account relevant considerations.

The petition said that had the ONGC,which was the joint venture partner of Cairn India,been offered its ROFR for the Cairn India’s shares and had it exercised its right,the exchequer would have benefited by over Rs one lakh crore.

However,Cairn Energy signed a deal with Vedanta group to sell its shares in Cairns India,without making an offer to the ONGC,the PIL said.

Agarwal was the first complainant in the 2G spectrum scam resulting in the lodging of the FIR.

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