As you know recent loan of 1.25 billion loan of cairn India to Vedanta raises concern about its corporate governance and management because – Before giving such a big loan to Vedanta, either Cairn should take shareholders permission or should at least intimate share holders in much advance. Last year around this time April 2013 cairn CEO gave a statement as below “We will retain the cash in the company,”. “This will give us flexibility for accelerated discovery and production from the Barmer basin.” But now after giving loan to Vedanta, Cairn spokes person is saying as below “This loan has been extended purely as an investment yielding better returns compared to fixed deposits where such sums were earlier invested at a return of around 2-2.5% p.a. The investment has been done at a return of 3% over and above the ongoing LIBOR rates. This return is much higher than the bank deposits for similar tenure and commensurate to a margin linked to a BB rated investmen...
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