Tuesday, April 17th, 2018

 

Columbia Asia Group now owns 99.12% of Malaysia-based subsidiary

PETALING JAYA: Columbia Asia Group now owns 99.12% of subsidiary Columbia Asia Sdn Bhd (CASB) after it completed the purchase of the Employees Provident Fund’s 29.72% interest recently.

Before that, the group’s stake stood at 69.4%.

Columbia Asia Group did not disclose the purchase price, noting that the “transaction between the two parties is under a mutual confidentiality”.

“There is no change in the strategy. We have many exciting plans in the works to grow Columbia Asia Group’s offerings and bring affordable, quality healthcare to more people across Asia,” it told SunBiz in an email response today.

“We will invest not just in additional hospital facilities, but also add to sub-speciality capabilities within our existing hospitals. We will also leverage on digital technologies to make our services even more accessible, efficient and cost-effective to our patients,” it added.

Meanwhile, asked on the reason for the disposal of its stake, the EPF said it had taken the opportunity to exit and take profit on its investment when Columbia Asia Group expressed interest to purchase its share in CASB.

The pension fund added that its investment in CASB was done through its private equity division and its private equity strategy is to secure profits from its investments, mainly through capital gain. The proceeds from the stake disposal would be used for future investments, the EPF added.

CASB, which owns Columbia Asia’s hospitals in Malaysia and Indonesia, is a subsidiary of Columbia Asia Group under Columbia Asia Healthcare Sdn Bhd. It focuses on the Southeast Asian market, with its main operations in Malaysia.
Columbia Asia Healthcare is 100% owned by US-based fund International Columbia US, LLC, which is owned by more than 150 private equity companies, fund management organisations and individual investors.

The group has 12 medical facilities in Malaysia, 12 in India, three in Vietnam, three in Indonesia and one in Kenya.


Bumi Armada’s Nigeria-based FPSO vessel ordered to halt operations, crude oil seized

PETALING JAYA: Bumi Armada Bhd’s wholly owned subsidiary Bumi Armada (Singapore) Pte Ltd has received a notice for the immediate shutdown of operations of its Nigeria-based floating production storage and offloading (FPSO) vessel, Armada Perdana, and a notice of seizure of crude oil produced and to be produced there.

The group said in a stock exchange filing today that it received a notice from Erin Petroleum Nigeria Ltd on April 11 advising it of a purported “force majeure event” and requesting the immediate and orderly shutdown of operations on Armada Perdana.

In addition, it also received a notice of seizure/attachment of goods from a third party informing it that the entire crude oil produced, to be produced and stored in the vessel has been seized.

This came with a writ of attachment in relation to legal proceedings to which the Bumi Armada group is not a party from the Federal High Court, Lagos.

Bumi Armada said it is of the view that the purported force majeure declaration by Erin Petroleum is wrongful under the operational and maintenance services contract and it is reviewing its legal options, including commencement of legal proceedings against Erin Petroleum, to uphold the contractual rights of Armada Oyo Ltd (AOL) and Bumi Armada Singapore under the contracts.

Bumi Armada maintains that the suspension of provision of services under the bareboat charterparty contract and the operational and maintenance services contract respectively remains in place and EPNL is not relieved from its obligation to make full payment of all payments due to AOL and Bumi Armada Singapore under the contracts.

The estimated financial impact of credit risk recovery for Bumi Armada group on results for the financial year ending Dec 31, 2018, is RM30 million.

On Bursa Malaysia today, Bumi Armada fell 1.6% to 90.5 sen on volume of 16.46 million shares.


Bumi Armada’s Nigeria-based FPSO vessel order to halt operations, crude oil seized

PETALING JAYA: Bumi Armada Bhd’s wholly owned subsidiary Bumi Armada (Singapore) Pte Ltd has received a notice for the immediate shutdown of operations of its Nigeria-based floating production storage and offloading (FPSO) vessel, Armada Perdana, and a notice of seizure of crude oil produced and to be produced there.

The group said in a stock exchange filing today that it received a notice from Erin Petroleum Nigeria Ltd on April 11 advising it of a purported “force majeure event” and requesting the immediate and orderly shutdown of operations on Armada Perdana.

In addition, it also received a notice of seizure/attachment of goods from a third party informing it that the entire crude oil produced, to be produced and stored in the vessel has been seized.

This came with a writ of attachment in relation to legal proceedings to which the Bumi Armada group is not a party from the Federal High Court, Lagos.

Bumi Armada said it is of the view that the purported force majeure declaration by Erin Petroleum is wrongful under the operational and maintenance services contract and it is reviewing its legal options, including commencement of legal proceedings against Erin Petroleum, to uphold the contractual rights of Armada Oyo Ltd (AOL) and Bumi Armada Singapore under the contracts.

Bumi Armada maintains that the suspension of provision of services under the bareboat charterparty contract and the operational and maintenance services contract respectively remains in place and EPNL is not relieved from its obligation to make full payment of all payments due to AOL and Bumi Armada Singapore under the contracts.

The estimated financial impact of credit risk recovery for Bumi Armada group on results for the financial year ending Dec 31, 2018, is RM30 million.

On Bursa Malaysia today, Bumi Armada fell 1.6% to 90.5 sen on volume of 16.46 million shares.


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Withholding tax – best option for e-commerce

KUALA LUMPUR: Imposing withholding tax on businesses in the digital economy could be the best option at a time when Malaysia wants to capture higher taxes on e-commerce transactions, according to tax experts.

Grant Thornton Malaysia’s head of tax advisory and international tax Daniel Woo said the withholding tax mechanism ideally should be the final tax but option should be allowed to register and file for net taxation.

“The current withholding tax provision may also need some adaptation, if not it cannot cover properly and not relevant to the digital economy,” he said at the Malaysian Tax Conference 2018 organised by the Malaysian Institute of Accountants and the Malaysian Association of Tax Accountants today.

The Inland Revenue Board’s (IRB) e-commerce division director Abdul Aziz Kechik concurred, saying that it is the best option for the time being.

“For withholding tax, they (businesses) don’t need to submit anything and we can straightaway tax them. With digitalisation, we want to broaden the withholding tax scope.”

He said IRB is still reviewing the e-commerce guidelines, but declined to comment further.

Woo opined the ideal withholding tax rate is between 10% and 15%.

“You cannot set too high or too low. If it is too high, the people will find ways to avoid it.”

He highlighted that the tax authority cannot take a general approach to impose the withholding tax on digital transactions, failing which will hinder the digital economy development.”

“We need to look at the conceptual and practical aspects in applying the withholding tax.”

With the imposition of withholding tax, foreign businesses must register with the local tax authority so that they can claim the credit to their home countries.

Meanwhile, IRB CEO Datuk Seri Sabin Samitah earlier said in his keynote address that the tax authority will strike a balance between supporting the new emerging digital economy and at the same time ensuring the right to tax and collect the right amount of tax.

“Tax authorities are looking at the best mechanism to tackle the (digital economy) issue, with the primary objective of safeguarding the tax base and revenue due to the country.”

The digital economy is projected to account for 45% of Malaysia’s gross domestic product by 2021 against a mere 7% in 2017.

Sabin also said that IRB is expected to contribute 42.6% to the country’s total budget needed this year, which translates into RM134.71 billion as announced in Budget 2018.


IRB: No timeline yet for cryptocurrency guidelines

KUALA LUMPUR: The Inland Revenue Board (IRB) is still in the midst of studying the cryptocurrency market and no timeline has been set for the release of the cryptocurrency guidelines, said its regulations and treaty division director Mohamad Fauzi Saat.

“We’re studying thoroughly before we can issue guidelines on cryptocurrencies. We’ll come out with simple principles of tax,” he said at the Malaysian Tax Conference 2018 organised by the Malaysian Institute of Accountants and the Malaysian Association of Tax Accountants today.

Nonetheless, digital currency exchanger Pinkexc Sdn Bhd founder and CEO Fakhrul-Razi Abu Bakar said the authorities’ stance on cryptocurrencies is the missing puzzle, leading to opportunity losses in the digital currency space, which is still in the grey area.

He noted that in order to impose taxes on cryptocurrency transactions, the government needs to categorise it – whether is cryptocurrency, commodity, security or asset.

Fakhrul lauded the sound cyptocurrency framework in Japan with a proper taxation on the conversion of cryptocurrencies into fiat money.

“They also categorised them into first class and second class cryptocurrencies. It is a good example.”

Meanwhile, Trio ADS (Advanced Digital Science) Sdn Bhd director Eric Ong advised the government to provide tax relief for bitcoin mining activities in the event of capital gain tax on cryptocurrencies considering the high equipment and electricity costs incurred.

He warned that Malaysia may lose its competitiveness if hefty taxes are imposed on cryptocurrency mining.

“Foreigners won’t pick Malaysia as their operation centre if the taxes are high. Again, the tax authorities have to look into the rules and regulations.”

As cryptocurrencies do not necessarily have to be pegged to fiat money, Ernst & Young international tax leader Anil Kumar Puri sees difficulties in quantifying the capital gain amount in cryptocurrency investments.

“When a cryptocurrency is pegged to another cryptocurrency, the challenge is that you have to come out with a market value for the cryptocurrency that you have.” – by Lee Weng Khuen


Retailers believe in customer service and human touch, not price war

KUALA LUMPUR: Retailers believe that offering professional customer service and a human touch in the advent of digital technology is the way to retain customers and boost sales amid concerns of customers making purchases elsewhere after they seek information from stores.

Tigas Alliance Group CEO and founder Simone Lee said its investments into the company are to bring forth the culture and people to deliver that service to customers, referring to its pharmacists. It has 20 pharmacists in 13 pharmacies.

“If we get the service right, business will come. If we sell ourselves short and to get the customers, we discount (our items), it’s never ending. We’re not in a discount model,” she said in a panel discussion at the StrongPoint Retail Agenda Forum today.

Tigas Alliance is operated by Berjaya Pharmacy Retail Sdn Bhd, a sub-subsidiary of Berjaya Corp Bhd.

She said it also boils down to whether businesses are in for the long haul. Usually discounts are thrown in by short term businesses.

“Millennials will also support you if they believe in your cause,” added Lee, urging retailers to build that connection with consumers.

DR Group Holdings Sdn Bhd director Dr Afendi Dahlan said amid the price undercuts by competitors and digitalisation that provides convenience, at the end of the day, it is about the humanisation of the retail experience.

“You can put the best gadget or equipment, but we’re social creatures. We look for the best customer experience and we don’t mind paying more for that. That’s why we have the five-stars hotels,” said Afendi.

He added that the airport retailer, which distributes a variety of imported chocolates in airports, do not give discounts because it believes that it is giving value for good service, better than the service from discounters.


Zelan gets arbitration notice from Hitachi

PETALING JAYA: Engineering and construction group Zelan Bhd’s wholly owned subsidiary Zelan Holdings (M) Sdn Bhd (ZHSB) has received an arbitration notice from Hitachi Ltd on disputes and differences arising from a sub-contract to supply, deliver, install, test and commission a water cooled chiller.

Hitachi is claiming against ZHSB, an aggregate amount of AED15.21 million (RM16.11 million) for the works done and materials on-site, materials off-site and subcontractor’s claims, suspension cost, demobilisation cost and interest on amounts certified.

ZHSB had on April 16 received the request for arbitration from the Secretariat of the International Court of Arbitration, International Chamber of Commerce.

The group said in a bourse filing that the dispute was for the Package No. MEP/005 sub-contract between Hitachi’s unit Hitachi Plant Technologies Ltd and ZHSB dated May 15, 2012, for the Meena Plaza mixed use development project in Abu Dhabi, United Arab Emirates.

“ZHSB shall take all necessary steps to defend or safeguard ZHSB’s interests in the arbitration proceedings, including but not limited to seeking legal advice on the merits of the claims by Hitachi,” said the group’s board of directors.

Zelan’s shares gained 5% to 10.5sen with some 1.47million shares done.


MB World divests stake in subsidiary

PETALING JAYA: MB World Group Bhd is disposing its 100% stake in its loss making subsidiary Emas Kiara Marketing & Engineering (EKME) Sdn Bhd to an undisclosed buyer for RM1.66 million.

The group said in a stock exchange filing the disposal is in line with its intention to dispose of its non-profitable and non-core businesses.

“EKME has been a loss making entity for the two consecutive financial years ended Dec 31, 2016 and Dec 31, 2017. The disposal will allow MB World to cease incurring further overheads for EKME’s operations and allow the company to redirect its resources to those activities identified and in-line with the group’s strategies, the group said.

MB World’s shares remained unchanged at RM2.00 with some 2300 shares done.