PETALING JAYA: Axiata Group Bhd and Ncell Private Ltd have been given three months to settle the capital gains tax of NPR61 billion (about RM2.25 billion) for the Ncell buyout deal.
In a filing with Bursa Malaysia, Axiata confirmed that the Supreme Court of Nepal has issued its full written order on April 9, 2019 in relation to its oral order dated Feb 6, 2019 on a public interest litigation filed by a group of Nepali individuals.
The public interest litigants had sought various orders from the Supreme Court, including that tax be collected from Ncell and Axiata Investments UK Limited (Axiata UK) in relation to the indirect transfer to Axiata UK of an 80% stake in Ncell through the sale of Reynolds Holdings Limited, by the previous foreign investor TeliaSonera Norway Nepal Holdings AS to Axiata UK.
The order states that the Large Taxpayers Office (LTPO) should determine the outstanding tax amount to be paid in relation to the transaction within three months from the date of receipt of the order by the LTPO.
It states that the responsibility to pay tax lies with Ncell and Axiata. Axiata is not a party to the litigation.
In addition, the distribution of dividends and any sale of Ncell shares by anyone is not allowed until the tax obligation is satisfied.
“Axiata and Ncell are reviewing the decision of the Supreme Court. Pending review of the decision by the Supreme Court, at this time, Axiata reiterates that it and Ncell have dutifully and responsibly complied with all relevant regulatory and legal requirements in relation to the transaction and acknowledge the order without prejudice to their remedial rights,” said Axiata.
The group said that it, together with Ncell, have made significant contributions to the socio-economic development of Nepal. It also said that Ncell directly and indirectly supports over 93,800 jobs and connects over 16.3 million customers across its networks.
“We remain committed as long-term investors in the country to further enhance digital connectivity and to improve the lives of all Nepalis. We have an exemplary track record of contributing to the development of Nepal and hope that we can continue to build a sustainable business for Ncell for the benefit of the country,” it said.
“As the largest taxpayer, contributing NPR125. 68 billion (about RM4.64 billion) in taxes since fiscal year FY2014/2015, we believe that the government of Nepal will be supportive of our commitment and use our investment as a demonstration of the willingness and openness of Nepal to attract further foreign investment,” it added.
According to Nepalese media reports, the Supreme Court had in February ordered Axiata and Ncell to pay the capital gains tax, after a years-long controversy over who should foot the tax bill following the sale of Ncell by TeliaSonera to Axiata in 2015.
