Cairn-Vedanta merger blues: After LIC, UIIC unhappy

Cairn India concluded its 9th AGM, possibily the last, before the company gets merged with Vedanta limited. At the AGM, which was thinly attended by the minority shareholders due to heavy rains in Mumbai, there was a surprise visitor from Chennai. The visitor was a representative of United India Insurance (UIIC) who flew down to convey his company's disappointment and disapproval to the merger of Cairn India with Vedanta. United India Insurance may be holding less than 1 percent stake in Cairn India but it has been an active institution. This is the second significant investor in Cairn India, after Life Insurance Corporation (LIC), showing its concern over the proposed merger with Vedanta.UIIC wants the management to know that merger scheme is not in favor of Cairn India shareholders. He argued that Cairn India has a higher book value as compared to Vedanta. This merger of Cairn is undertaken to pare down the debt of Vedanta is detrimental to cairn India’s capex programme. However, Cairn India CEO Myank Asher defended the merger despite objections raised by the UIIC representetive saying: "So you know my view.. As far as this is concerned the company has not just provided the strategic rationale but the operational details about this as well and at the end of the day, the shareholders will make up their mind. What I saw was a fairly positive reaction to the merger."Meanwhile,  Omkar Goswami, who was part of the independent directors committee recommended the merger to the shareholders, also claimed that the merger was necessary since there was no certainty if Rajasthan oil fields would get exploration extension beyond 2020. He further disclosed that the scheme of merger also factored in the tax liability imposed by the tax department.