State-owned Oil and Natural Gas Corp, India's highest profit earner, has been asked by the government to pay interim dividend for the 2005-06 fiscal, a request its board may consider next week.
The government being 74 per cent owner of ONGC benefits the most out of dividend payout. ONGC is among the country's top most dividend payer (more than 30 per cent of its net profit every year is paid as dividend to the company's shareholders).
India's biggest wealth creator? ONGC
ONGC chairman and managing director Subir Raha said the government had earlier advised it to pay a special dividend. However, since there was no provision of special dividend in company law and owing to company's requirement of funds for overseas acquisitions and cash-outflow due to accident at an oil facility in its prime Mumbai High fields, the request was turned down by the board.
Ministry of petroleum and natural gas had on July 12, 2005 sought a special dividend from ONGC.
Asked if the government had asked ONGC to go for a stock split, he said: "We have no advise for stock split."
Raha admitted that it had received a notice from the tax authorities for payment of about Rs 1,000 crore (Rs 10 billion) in income tax. The income tax authorities have asked the public sector firm to pay its tax on the price realised on sale of its crude before offering discount.