Media Statement in Response to Nepali News Reports on the Decision by the Supreme Court of Nepal in Relation to CGT Claim
Kuala Lumpur, 7 February 2019 – Axiata Group Berhad (“Axiata” or “the Group”) refers to the various articles in relation to the decision by the Supreme Court of Nepal on two writ petitions by NCell Private Limited (“Ncell”) and Reynolds Holdings Limited (“Reynolds”), and two Public Interest Litigations (“PIL”) brought against various parties in relation to the Capital Gains Tax (“CGT”) claim following the completion of the sale of Reynolds to Axiata Investment (UK) Limited (“AXIATA UK”) on 12 April 2016 (the “Transaction”).
Reynolds is the 80% parent company of Ncell, formerly owned by Telia Company, a large European telecommunications group (the “Seller”).
The Supreme Court had in its ruling on 6 February 2019, dismissed both the writ petitions by Reynolds and Ncell, and one of the PIL. However, Axiata understands that the Court has ruled in favour of the PIL filed by Mr Dwarikanath Dhungel and others broadly pleading that the onus of CGT is on Ncell, Reynolds and Axiata UK.
None of the Axiata parties to the litigation has received the judgment and order of the Supreme Court following its ruling, nor does the Group have any details of what was ordered by the Supreme Court.
Ncell, Reynolds, and Axiata UK were given the full clearance by the Large Tax Payers Office of Nepal [“LTPO”] of its obligations to withhold any CGT 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 CGT is not applicable on offshore transactions and even if applicable, any shortfall on payment is the responsibility of the Seller.
Axiata will provide further updates upon receiving the order of the Supreme Court.
Axiata is one of the leading telecommunications groups in Asia with approximately 350 million customers and with a presence in 11 countries. In pursuit of its vision to be the New Generation Digital Champion by 2021, the Group has transformed itself from a holding entity with a portfolio of pure-play mobile assets into a Triple Core Strategy driven business with the focus on Digital Telco, Digital Businesses and Infrastructure.
Within ASEAN and South Asia, Axiata has controlling stakes in market-leading mobile and fixed operators in the region including ‘Celcom’ in Malaysia, ‘XL’ in Indonesia, ‘Dialog’ in Sri Lanka, ‘Robi’ in Bangladesh, ‘Smart’ in Cambodia and 'Ncell' in Nepal. The Group also holds strategic interests in ‘Idea’ in India and ‘M1’ in Singapore. Axiata is in the cusp of transforming its mobile operations into Digital Telcos through digitisation and convergence.
‘edotco’, the Group’s infrastructure company, operates in six countries to deliver telecommunications infrastructure services, amassing approximately 27,500 towers. Presently the 12th largest independent tower companies globally, it aims to be one of the top regional telecommunications tower companies and is committed to responsible and sustainable business operations.
Axiata Digital and Axiata Business Services are the digital businesses arms of the Group. Together, these businesses are focused on capturing the rapid growth in digital financial services (‘Boost’), digital advertising (‘ada’), enterprise solutions/IoT (‘Xpand’) and platform services (‘APIgate’) with user access to global markets.
As a committed and long-term investor, Axiata provides employment to 25,000 people within its operations. In line with its sustainability goals, the Group actively supports and drives young talent development; disaster response and recovery; as well as green initiatives. Axiata’s broader goal Advancing Asia pieces together the best in the region in terms of innovation, connectivity and talent.