New Delhi: UK's Cairn Energy has informed the oil ministry that it will comply with all contractual obligations in selling majority stake in its Indian arm and that London-listed Vedanta Resources was a fit candidate to take over operations, reports PTI.
"Cairn Energy has replied to clarifications we had sought on the Vedanta deal. We are studying it," a top oil ministry official said.
The official said the Edinburgh-based firm has stated that it was committed to following the law of the land and will fully comply with all contractual obligations.
Cairn Energy is selling a majority of its 62.37% in Cairn India - the company that found the nation's largest onland oilfield, to billionaire Anil Agarwal-controlled Vedanta for up to $9.6 billion.
"The company has acknowledged that contracts for some of the oil blocks Cairn India holds, require consent of the government to be taken in the event of a change of control," the official said. "It has told us that it is committed to complying with all such contractual obligations."
Cairn Energy said the proposed sale of majority stake "will not adversely affect the performance or obligations under the various Production Sharing Contracts (PSCs) nor be contrary to the interests of India."
Vedanta Resources, it said, had the wherewithal to takeover the parent company guarantees that Cairn Energy had given for performance of obligations under PSCs. Vedanta is the world's fifth largest mining company had 10 times better financial capabilities than Cairn Energy Plc.
Also, Vedanta has promised continuity in operations at Cairn India, which will remain independent, and its management team and organisation, Cairn Energy said.
Uncomfortable with a non-oil company taking over Cairn India, the oil ministry had on 19th August written to Cairn Energy Plc stating that certain PSCs have parent company guarantees and some PSCs have explicit provision of prior government consent in case of change of ownership.
New Delhi: Rating agency Crisil has sought approval from the Foreign Investment Promotion Board (FIPB) to sell 5% of its stake in the National Commodity and Derivative Exchange of India (NCDEX) to JM Financial Trustee Company, to meet the regulatory standards, reports PTI.
Currently Crisil, a subsidiary of global rating agency Standard & Poor's, has 12% stake in agri-commodity bourse NCDEX. It has to reduce it to 5% by September-end to meet the FIPB norms.
According to a senior government official, "Crisil has approached FIPB, which in turn has sought comments from the consumer affairs ministry about the stake sale of Crisil in NCDEX to JM Financial Trustee Company, promoted by J M Financial & Investment."
The consumer affairs ministry, which overseas the functioning of 23 commodity exchanges, is examining the matter and would take the views of the sector regulator Forward Markets Commission (FMC) in this regard, the official said.
When contacted, Crisil and J M Financial declined to comment.
FIPB is a nodal government agency that monitors foreign direct investment into the country. As per the news norms, foreign entities are not allowed to hold more than 5% stake in domestic commodity exchanges.
FIPB has set the deadline of 30th September for foreign firms to offload their extra stake in commodity bourses.
Earlier this year, Fidelity reduced its stake in the Multi Commodity Exchange (MCX) from 9% to 5% to meet FIPB norms.
Last year, ICE and Goldman Sachs, which currently hold 4% each in NCDEX, together sold 5% in NCDEX to leading sugar refined Shree Renuka.
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