Cairn retains a ~10% investment in Cairn India Limited which is listed on the Bombay Stock Exchange and the National Stock Exchange of India. Cairn India has interests in India, Sri Lanka and South Africa.
Cairn has been operating in India since 1996. In 2007 Cairn listed the Indian part of its business, Cairn India Limited, on the National and Bombay Stock Exchanges of India raising US$2 billion and retaining a 69% holding.
In 2011 Cairn sold 40% of its holding in Cairn India Limited to Vedanta Resources plc, a global natural resources company, for approximately US$5.5 billion, retaining a 22% holding.
In 2012 Cairn sold an aggregate 11.5% holding in Cairn India Limited for a net cash consideration of ~US$1.3bn, retaining a ~10% shareholding.
In January 2014, Cairn received a request from the Indian Income Tax Department to provide information in relation to the year ended 31 March 2007. The correspondence indicates that the request for information is in respect of amendments introduced in the 2012 Indian Finance Act which seek to tax prior year transactions under legislation applied retrospectively. While the interactions with the Indian Income Tax Department continue, Cairn has been restricted from selling its shares in CIL (valued at US$1.1bn as at 30 June 2014). The Group will take whatever steps are necessary to protect its interests. The actions of the Indian Income Tax Department were taken without any prior discussion with Cairn and could not have been anticipated. It is therefore not possible at this stage to predict the course of any future action it might take.
Cairn has not received a tax assessment or demand from the Indian Tax Department, and continues to seek resolution and to take all necessary steps to protect shareholders' interests. Cairn has re-confirmed with its advisers that throughout its history of operating in India the Company has been fully compliant with and paid applicable taxes under the legislation in force at the time.