Hong Kong tycoon to appeal $776m Tax Office decision
The two companies linked to Asia's richest person will appeal against court rulings ordering them to pay $776 million in unpaid tax and penalties.
Li Ka-shing, the chairman and founder of the Hong Kong-based conglomerate Hutchison Whampoa, is worth $US31 billion, ($33 billion) according to Forbes magazine. Two of his companies - Cheung Kong Infrastructure and its subsidiary Power Assets Holdings, were recently found to owe the Commonwealth of Australia $380.2 million and $395.8 million. The dispute relates to income tax dating from 2000 to 2009.
In the Federal Court of Australia, Justice Michelle Gordon said Cheung Kong and Power Assets were in default, and the court should enter judgment for the tax commissioner against them.
She added that the companies' failure to provide an address for service of legal documents was "continuing and occasioning unnecessary delay and prejudice" to the tax commissioner. The Tax Office filed its claim in June.
The companies were also ordered to pay the ATO's costs.
Hong Kong-based Cheung Kong Infrastructure and Power Assets could not be contacted by Fairfax Media on Wednesday. But a statement to Bloomberg said the ATO's claims were "without foundation", and the companies would defend against the lawsuit.
Cheung Kong Infrastructure owns substantial assets in Australia. These include electricity distributors CitiPower and Powercor, SA Power Networks, the renewable energy power transmission business Transmission Operations Australia, and the natural gas distribution company Envestra. Its results for the six months to June show a 1 per cent increase in Australian profit, to $HK587 million ($80.6 million).
In a recent report by the broker Citi, Cheung Kong Infrastructure was named as one of five "winners" in utilities.
It identified "further upward earnings potential as CKI has the financial resources ($HK5.1 billion cash on hand and only 14 per cent net debt to equity ration by end 2011) to make acquisitions."