Laxmi Capital News
SC allows Ncell to repatriate dividend

The Supreme Court (SC) on Sunday paved way for private telecom companyNcell to repatriate its dividend from Nepal.

A bench of justices Kedar Prasad Chalise and Om PrakashMishra allowed repatriation of the profit earned by Ncell in Nepal. The benchof justices stated that disallowing Ncell to repatriate its dividend willadversely affect the company and its stakeholders. Furthermore, the SC verdicthas stated that any company operating in Nepal, as per the Foreign Investmentand Technology Transfer Act, 1992, can repatriate its profit out of foreigninvestment in Nepal in foreign currencies.

Similarly, the SC verdict has highlighted that Ncell hascleared all its capital gains tax (CGT) of the Ncell buyout deal, whileTeliaSonera, the previous owner of Ncell, is liable to clear CGT to thegovernment. As per SC, stopping Ncell from repatriating dividend is illogical.

Following the verdict to this effect from the apex court, Ncellcan now repatriate its dividend amounting to almost Rs 72 billion.

Earlier, the government had barred Ncell from repatriatingits dividend until the issue of CGT related to the Ncell buyout deal wassettled. Subsequently, Nepal Rastra Bank (NRB), on July 10, had issued adirective barring banks and financial institutions from offering exchangefacilities to Ncell, Axiata (current owner of Ncell) and Reynolds Holdings Ltd(subsidiary of TeliaSonera).

The Swedish telecom company TeliaSonera had sold its majoritystake at Ncell to Malaysian telecom firm Axiata. However, the Ncell buyout deallanded in controversy after the concerned bodies tried to dodge the liabletaxes in the deal.

In June, the Large Taxpayers Office (LTO) had determined Rs60 billion in CGT from the Ncell buyout. Following immense pressure, Ncell hasalready paid Rs 23.6 billion as CGT of the deal to the government.

However, the government has not been able to recover theremaining portion of CGT in the Ncell buyout deal as TeliaSonera — the sellerof the company — has already left Nepal.

Source: The HimalayanTimes, 26th December 2017

 

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