TNB shares slump after Federal Court upholds RM1.25b tax bill
As at 9.40am, the counter dropped 60 sen, or 4.11 per cent, to RM14, contributing a total of 6.0 points towards the decline in the local benchmark index, with 7.52 million shares changing hands.
In a statement filed with Bursa Malaysia yesterday, the power utility company stated that the Federal Court had set aside the earlier decisions of the High Court and the Court of Appeal, which had granted its judicial review application to quash the notice of additional assessment dated July 13, 2020.
TNB said the notice of additional assessment dated July 13, 2020, issued by IRB to the company for the 2018 assessment year initially amounted to RM1.81 billion.
'However, following a penalty remission granted by IRB through a consent order dated December 29, 2020, the net amount was reduced to RM1.25 billion,' said TNB, adding that this was to be read with its previous announcements made between July 2020 and June 2025.
Meanwhile, despite the court ruling, Hong Leong Investment Bank Bhd said it is not overly concerned about the potential one-off tax provision.
'We remain confident that TNB will reach a constructive resolution with all relevant stakeholders (particularly IRB) to minimise impact on its balance sheet and cash flow.
'Looking ahead, we expect TNB to benefit from a higher regulated asset base starting in 2025 under RP4-RP5 (2025-2030), as well as new tenders for gas power plants and renewable energy projects.
'We view any short-term share price weakness as a buying opportunity for long-term investors,' it said in a note today. — Bernama
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