Essar Energy plummeted on Tuesday afternoon after its Indian oil division was told that it is no longer eligible to benefit from a deferred tax payment scheme.
Shares plummeted 28% to 48.5p in late trading after the Indian Supreme Court ruled against the Gujarat High Court in letting Essar Oil pay sales tax in deferred instalments.
"The company has availed of approximately INR 63 billion (approximately US$1.235 billion) of Sales Tax benefit which was to be paid in deferred instalments," Essar Energy revealed today.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Today's court ruling means that the company will not be able to partake in this scheme going forward.
"The company will provide further information in the matter after studying the judgment passed by the Hon'ble Supreme Court," Essar said.
BC
-
Family investment companies explained: how the ultra wealthy shield their money from the taxmanWealthy families are increasingly turning to family investment companies to keep more of their money away from HMRC – but what are these arrangements and how do they work?
-
How to boost your pension pot as 35% of UK over 50s face huge retirement savings gapOver 50s are facing a later life with little to no funds - but there are steps you can take now to boost your pot.
