It is reported that home ministry of India has given its approval to London listed miner Vedanta Resources' buying majority stake in Cairn India for USD 8.7 billion.

Sources privy to the development said that the home ministry, while giving the security no-objection certificate highlighted eight areas of concern, including 64 legal proceedings against Vedanta and its subsidiaries in various courts.

The security clearance was one of the conditions that the government had set for Vedanta group buying 40% stake in Cairn India from UK's Cairn Energy Plc.

Cairn Energy and Vedanta have already agreed to the other condition of Cairn India paying cess and royalty on crude oil produced from its mainstay Rajasthan oilfields.

Cairn India does not pay royalty and cess on its 70% share in the Rajasthan block as per the contract, but its current majority owner, Cairn Energy, and new owner Vedanta forced it to accept the government condition of making royalty cost recoverable and paying INR 2,500 per tonne cess.

Also, the government had a conditioned approval to the deal on ONGC, which has 30% stake in Rajasthan block and pays royalty on behalf of Cairn India, giving its NOC. Oil and Natural Gas Corp has agreed to give NOC if Cairn India accepts to make royalty cost recoverable and pay cess.

(Sourced from BS)