)
The government challenged the merger of Vedanta Resources Plc's local units in court on grounds that the deal by the flagship company of billionaire Anil Agarwal was aimed at avoiding taxes.
The merger is a "device" for tax evasion, according to the petition filed by the ministry of corporate affairs citing the income tax department. The ministry has sought nullification of the amalgamation.
The Supreme Court will hear the plea on Wednesday.
Sesa Sterlite, the country's biggest aluminum maker, emerged from the combination of Vedanta's iron ore mining unit Sesa Goa and copper producer Sterlite Industries (India) in an all-share transaction. Investors got three Sesa Goa shares for five shares of Sterlite, while London-based Vedanta transferred to the new entity for $1 its 38.8 per cent holding in Cairn India, including debt of $5.9 billion.
| COURTING TROUBLES |
|
The move, announced in February 2012, cut the parent's debt as more than half was transferred to the new entity. Sesa Sterlite spokeswoman Roma Balwani declined to comment.
Shares of the Panaji, Goa-based Sesa Sterlite fell 1.2 per cent to Rs 289.05 at close in Mumbai. The benchmark S&P BSE Sensex fell 0.1 per cent.
Earnings at Sesa Sterlite mainly come from dividends paid by its oil and gas and zinc units. The company has faced court- ordered curbs on mining and delays in its plans to secure the government's remaining stake in unit Hindustan Zinc.
