Axiata confident of bringing back dividends from Nepal

PETALING JAYA: Axiata Group Bhd said yesterday the central bank of Nepal has not responded to a submission to repatriate dividends from Nepali unit Ncell Pvt Ltd and it is confident that Nepal’s government will not stop it from repatriating dividends which rightfully belong to the Malaysian telco.
The group was responding to a report out of Nepal in Himalayan Times, which stated that the central bank denied Axiata’s submission to repatriate dividends to the tune of 72 billion rupees (RM2.9 billion) until the issue of capital gains tax (CGT) in relation to the Ncell deal is settled. The article did not identify the source of its information.
The telco told Bursa Malaysia Ncell had received a confirmation letter from Nepal’s Large Taxpayers Office (LTPO) that conclusively certified and acknowledged that Ncell is fully cleared of CGT payment with a further advance deposit of about 13.6 billion rupees (RM558 million) paid to the LTPO as directed by the agency. The payment was made on behalf of TeliaSonera Norway Nepal Holdings AS.
Axiata said it is confident that the government of Nepal will not discriminate and contradict the aegis of the Bilateral Investment Treaty by blocking Axiata from repatriating its dividends rightfully due to the group.
Axiata announced the acquisition of an 80% stake in Ncell in December 2015 for US$1.365 billion (RM5.87 billion) from TeliaSonera and the deal is subject to CGT.
The Nepal Telecommunications Authority reportedly backtracked on its decision to grant Ncell a 4G licence until the ongoing dispute over CGT is settled. Ncell had in May last year made a payment of 9.9 billion rupees (RM411 million) and followed by the recent advance deposit of RM558 million.
Despite that, news reports said that TeliaSonera, which has exited Nepal, still owes 10% CGT and LTPO could ask Ncell to pay TeliaSonera’s share if the latter fails to pay up.
Axiata's share price was up 23 sen to RM4.87 on some 3.76 million units traded yesterday, bringing it a market capitalisation of RM43.82 billion.