Vedanta stocks sink after Cairn India boss resignsAug 9, 12:44 pm
London, Aug. 9 (ANI): The share prices of London-based mining company Vedanta took a sharp dip, following the resignation of CEO and Managing Director of Cairn India, Rahul Dhir.
Vedanta Resources took control of Cairn India in a deal worth 8.7 billion dollars, eight months ago.
Cairn India revealed that Dhir, a former Merrill Lynch banker who had been in charge of Cairn India for more than six years, was quitting his roles as both chief executive and managing director of the company "to pursue his entrepreneurial interests".
Following the news, Vedanta closed deep in the red, retreating 21 points to 986 points, while Cairn Energy, which still owns 18 per cent of Cairn India after selling a controlling stake to Vedanta, dropped 12.9 points to 296.5 points.
“Cairn India being a key division... the departure of a top management figure may trigger a negative reaction in the immediate term, but I wouldn't expect it to reflect in [Vedanta's] performance nor Cairn India's operational performance going forward,” The Independent quoted Liberum Capital's Ash Lazenby, as saying.
With Dhir holding a decent chunk of shares, any punters hoping to follow his example were left frustrated as he told Bloomberg that he was unsure whether or not he would sell his stake, which is worth around 1.1 billion rupees, the paper said.
A number of City voices praised Dhir for his decision, with Atif Latif, Director of Trading at Guardian Stockbrokers, warning that any replacement "will be closely compared and scrutinised as [he] was a key part of the main management team", the paper added. (ANI)
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