Government Asks State-Run Banks To Withdraw Cash From Cairn's Accounts: Report

Cairn was awarded damages of more than $1.2 billion plus interest and costs in December in a long-drawn-out tussle with the government over its retrospective tax claims.

India has asked state-run banks to withdraw funds from their foreign currency accounts abroad, two government officials and a banker said, as New Delhi fears Cairn Energy may try to seize the cash after an arbitration ruling in a tax dispute. Cairn was awarded damages of more than $1.2 billion plus interest and costs in December in a long-drawn-out tussle with the Indian government over its retrospective tax claims. While New Delhi has filed an appeal, the London-listed firm has started identifying Indian assets overseas, including bank accounts, that could be seized in the absence of a settlement, which Cairn says it is still pursuing. The company has registered its claim against India in courts in the United States, Britain, France, the Netherlands, Singapore and Quebec, moves that could make it easier to seize assets and enforce the arbitration award. "Earlier this week a guidance was sent to state-run banks to withdraw funds from their nostro accounts," one of the government officials, who asked not to be named, told Reuters, adding that the finance ministry had issued the guidance.