New Delhi: As the government grapples with its arbitration notice against a Rs 10,247 crore tax demand, British oil explorer Cairn Energy has said a quick judicial resolution to the issue will help restore confidence of retrospective tax-rattled international investors.
Company chief executive Simon Thomson said it wants the government to join the arbitration to arrive at a quick judicial resolution and provide clarity.
"Clarity would allow the international investment community so see that India is looking to resolve these retrospective tax cases as quickly as possible," Thomson told PTI.
Cairn Energy has named former Bulgarian minister and lawyer Stanimir A Alexandrov as its arbitrator for resolution of the tax demand linked to 2006 reorganisation of Cairn India, its one-time Indian subsidiary with oilfields in Rajasthan.
"Our reorganisation was approved by the Ministry of Finance in India eight years ago," he said.
An inter-ministerial group comprising of officials of ministries of finance, law and petroleum are likely to meet within next few days to decide on government stand on Cairn's arbitration notice.
"Cairn first invested in India more than 20 years ago and created a business in cooperation with the Rajasthan and Indian governments that will generate billions of dollars of revenue for India," he said.
The company, which in 2011 sold majority stake in Cairn India to mining major Vedanta Resources, has had to scale back investments as it was barred by the Income Tax Department from selling its residual 9.8 percent stake.
"Cairn has sold assets and cut its workforce by 40 percent and international investors have suffered, that's why a move to go to arbitration can help restore confidence," he said.
Cairn, he said, wants clarity. "What we are pitching for is a judicial process to being to get the issue resolved quickly. We have selected an arbitrator and now we are waiting for government to name its.
"Our expectation is that government responds quickly to send message to international investor community that it is for resolving tax issues through judicial progress quickly," he said.
He said Cairn Energy had paid all its taxes due in India and had followed the law while doing the internal reorganisation and the subsequent listing of Cairn India on local bourses.
"What we have done (internal restructuring) is within our legal rights and following the law. Our reorganisation had been approved by several authorities in India. We have done absolutely correct thing. We paid all taxes and dues," he said.
Stating that as an investor Cairn wants an quick resolution to help restore investor confidence, he said, "That's why I am saying move around and get an early decision."
