Malaysia-based Axiata Group stated it has received no official confirmation of a ruling by a Nepal court which could leave it liable to a hefty tax payment relating to an acquisition of Ncell in 2016.
News outlet The Edge Financial Daily last week reported Axiata had been ordered to pay MYR2.16 billion ($531 million) in capital gains tax after Nepal’s Supreme Court ruled in favour of a public interest litigation action led by Dwarikanath Dhungel.
The tax payment relates to an acquisition of Reynolds Holdings, which held an 80 per cent stake in Ncell, by Axiata Group subsidiary Axiata UK. Sunivera Capital holds the remaining 20 per cent direct local shareholding, as required by law.
“We wish to clarify that none of the Axiata parties to the litigation has received the judgment and order of the Supreme Court of Nepal following its ruling, nor does the Axiata Group have any details of what was ordered by the Supreme Court,” it stated.
Axiata added that all parties involved in the deal “were given the full clearance by the Large Tax Payers Office (LTPO) of its obligations to withhold any capital gains tax payment on behalf of the seller in relation to the transaction via the letter from LTPO dated 4 June 2017, following the full and final payment made by Ncell, albeit under protest on the basis that capital gains tax is not applicable on offshore transactions and even if applicable, any shortfall on payment is the responsibility of the seller.”
The statement added it will make additional announcements should there be any material update.