16 Nov 2018, The Edge Financial Daily
KUALA LUMPUR (Nov 15): Property developer EcoFirst Consolidated Bhd said it does not expect any financial and operational impact from the Inland Revenue Board’s (IRB) tax claims, amounting to RM1.34 million.
Yesterday, Sawitani Sdn Bhd, a wholly-owned subsidiary of EcoFirst, received a winding-up petition from the IRB for the tax claims. The claims were derived from an outstanding sum of RM963,849.31 plus interest at the rate of 8% per year and cost of RM2,000.
“The claims have been fully accounted for in our financial statements and we do not expect any loss to arise from this,” said group chief executive officer Datuk Tiong Kwing Hee in a statement today.
“The management, together with our financial and legal advisors, are taking steps to resolve the matter amicably with the IRB. We aim to propose another settlement before the date of trial on Jan 17, 2019 and in the event the proposal is accepted, the IRB will withdraw the winding up petition,” he added.
In a separate filing with Bursa Malaysia today, EcoFirst also pointed out that Sawitani is not a major subsidiary of EcoFirst and EcoFirst’s total cost of investment in Sawitani was RM9.89 million.
EcoFirst said it had previously proposed a settlement, but received no feedback from the IRB.
“Until the receipt of the winding up petition, the group was unaware that the proposal had been rejected by the IRB, who issued a statutory notice of demand to the wrong registered address,” the filing added.
To recap, the IRB had filed a suit against Sawitani for real property gains tax outstanding for assessment year 2000.
The IRB had filed an application for summary judgment, which was allowed on Sept 27, 2011. However, Sawitani’s appeal to the Court of Appeal was dismissed on May 15, 2012.
EcoFirst shares closed unchanged at 30 sen today, with 91,100 shares done, bringing a market capitalisation of RM240.95 million.