Axiata Group has confirmed that it has received no official orders to pay capital gains tax on its 2016 acquisition of Nepal’s Ncell.
Last week, The Edge Financial Daily reported that a Nepali court had ordered Axiata to pay MYR2.16 billion ($531 million) in taxes related to the acquisition of Reynolds Holding, which owned 80% of Ncell. The company was acquired by Axiata UK, a subsidiary of the group.
The remaining 20% of Ncell is held by Sunivera Capital as a direct local shareholding, in compliance with Nepali law. The outstanding tax on Axiata’s acquisition of Ncell has been a long-running issue, but the country’s Supreme Court has now ruled in favour of a public interest litigation arguing that Ncell and Axiata were liable.
However, in response to the reports, Axiata stated: “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.”
Additionally, it noted that the deal had received “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.”
