Firms controlled by Asia's richest man face Australian tax fight
SYDNEY (Reuters) - The Australian Tax Office is pursuing unpaid taxes from companies controlled by Asia's richest man, Li Ka-shing, that relate to profits made in the country's power, gas and water industries.
The Federal Court recently ruled against two companies related to Li's Cheung Kong (Holdings) Ltd (0001.HK: Quote), ordering they pay A$776 million ($726.92 million) in unpaid tax and penalties.
The two companies, Cheung Kong Infrastructure Holdings (1038.HK: Quote), the largest listed infrastructure company in Hong Kong, and energy subsidiary Power Asset Holdings Ltd (0006.HK: Quote), have made hundreds of millions of dollars from their Australian investments.
Wendy Tong Barnes, chief corporate affairs officer at Cheung Kong Infrastructure Holdings, said in an email to Reuters on Thursday that the company has obtained legal advice and intends to "vigorously challenge" the ruling.
Many of the group's Australian investments were privatized state government utilities, including a 50 percent stake in South Australia Power Networks. Other investments include a 19 percent holding in Envestra Ltd ENV.AX, Australia's biggest distributor of natural gas.
Judge Michelle Gordon of the Victorian division of the Federal Court ordered on August 30 that Cheung Kong Infrastructure pay A$380 million and Power Asset Holdings pay A$396 million for unpaid income tax from 2000 to 2009, as well as penalties for failing to lodge documents with the tax office.
The court made the judgments after the two Hong Kong companies failed to provide an address for the delivery of legal documents, allowing the judge to rule without considered more detailed arguments.
No representatives from either company were at the hearings.
Penalties and interest for failing to file documents continue to accrue in the ongoing case.
(Reporting By Jane Wardell. Additional reporting by Yimou Lee in HONG KONG; Editing by Matt Driskill)
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