KUALA LUMPUR: Axiata Group Bhd’s indirect 80%-owned Nepalese subsidiary Ncell has settled the demand amount of 22.44bil rupees (US$185mil) sought by the Large Taxpayers Office (LTPO) of Nepal.
It also paid an additional sum of 990.25mil rupees (US$8.06m) as interest, the telco announced to Bursa Malaysia on Monday.
“Ncell’s payment of the total amount was made under protest and expressly without prejudice to Ncell and Axiata UK's position in the international arbitration proceedings commenced by Ncell and Axiata UK against the Federal Democratic Republic of Nepal, ” it said.
To recap, Axiata announced on Nov 21,2019 that Nepal’s Supreme Court issued its full written judgment on the writ petition filed by Ncell, against the LTPO and others on April 22,2019.
The Supreme Court held that Ncell was liable to pay 21.10bil rupees (about US$175mil) in allegedly outstanding capital gains tax (including interest and penalties).
This was in connection with the sale in 2016 by TeliaSonera Norway Nepal Holdings AS to Axiata Investments (UK) Ltd (Axiata UK) of 100% of the shares of Reynolds Holdings Ltdd, a St Kitts & Nevis company which owns 80% of Ncell.
On Dec 6,2019, Axiata announced the LTPO served a demand letter against Ncell for 22.44bil rupees (US$185mil) based on the Supreme Court judgment.
In the latest development, Ncell had on April 12, finally settled the demand amount and interest totalling US$193.06mil which was made under protest and expressly without prejudice to Ncell and Axiata UK's position in the international arbitration proceedings commenced by Ncell and Axiata UK against the Nepal government.
“In this arbitration, Ncell and Axiata UK dispute the entirety of the capital gains tax allegedly payable by Ncell in connection with the transaction and will argue, among other things, that the imposition of capital gains tax by Nepal in relation to the transaction is unlawful.
“Axiata UK and Ncell will seek remedies including restitution of sums already paid, a permanent injunction against further attempts to collect capital gains tax from Ncell in connection with the transaction and damages for all losses suffered in consequence of Nepal's unlawful conduct, ” it said.