Govt. alerts PSBs as Cairn may seize overseas assets

Oil firm won $1.2 bn award in tax case

The Finance Ministry has asked public sector banks (PSBs) to be on a high vigil against any attempt being made to seize their overseas deposits to recover $1.2 billion that the U.K.’s Cairn Energy has been awarded against India levying retrospective taxes, sources said.

Cairn had previously stated it can seize Indian assets abroad if it is not paid $1.2 billion plus interest and cost an international arbitration panel had awarded against levy of retrospective taxes.

Cash of Indian banks lying in nations such as the U.S. and the U.K. are said to be easy targets for seizing and enforcing the arbitration award. To guard against cash being taken over, the Ministry has asked PSBs to be extra vigilant and immediately report back any attempt Cairn makes to legally attach the deposits, two sources aware of the matter said.

This will allow the Indian government to quickly take legal recourse to prevent the assets from being taken over, they said.

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