False: State banks not asked to withdraw cash held abroad over Cairn dispute

New Delhi, May 23: The finance ministry on Sunday dismissed media reports claiming that the government asked state-owned banks to withdraw funds from foreign currency accounts abroad over the Cairn legal dispute.

"Certain vested parties appear to have orchestrated such misleading reporting, which often relies upon unnamed sources and presents a lopsided picture of factual and legal developments in the case," it said.

The government further said it is committed to pursuing all legal avenues to defend its case in this dispute worldwide.

A Reuters report had claimed that India has asked its state-run banks to withdraw funds from foreign currency accounts fearing that Cairn Energy may "try to seize the cash" after Cairn was awarded damages of more than $1.2 billion, plus interest and costs in December in a legal tussle over retrospective tax claims.

UK's Cairn Energy Plc said it is taking all necessary actions to access the USD 1.7 billion it was awarded by an international arbitration tribunal after overturning a retroactive tax demand slapped by the Indian government.