KUALA LUMPUR (June 12): Shares in Axiata Group Bhd fell as much as 3.6% or 10 sen to a six-month low in the evening session on Monday (June 12), after it said it will book a RM376.6 million write-off, following the dismissal of arbitration claims the group and its Nepalese mobile network operator Ncell brought against the Nepalese government over a tax dispute.
At the time of writing, the counter was down nine sen or 3.24% at RM2.69 — still a six-month low — against the FBM KLCI’s 0.87% increase and a 0.07% rise in the Bursa Malaysia Telecommunications & Media Index.
The counter’s trading volume stood at 6.23 million shares, double its two-month average. It was the third largest decliner on Bursa.
The arbitration, filed by Axiata Investments (UK) Ltd and Ncell Pte Ltd, was in relation to capital gains tax paid to the Nepalese government, following Axiata UK’s acquisition of an indirect 80% shareholding in Ncell in 2016 for US$1.365 billion (RM5.91 billion at the time) from Reynolds Holdings Ltd.
Axiata paid an outstanding capital gains tax of US$185 million (RM800 million then) to the Nepalese government “under protest” back in April 2020.
Last Friday, the Bilateral Investment Treaty arbitration tribunal at the International Centre for Settlement of Investment Disputes dismissed Axiata’s claims, after which the group said it will “assess any other financial impact including further asset impairment” following the decision.
“The award may have material impact on Axiata Group’s consolidated net assets per share and earnings per share for the financial year ending Dec 31, 2023,” it said in a statement on Monday.