Wednesday, 21 February 2018 | MYT 7:09 PM
Government serves winding-up petition on Eden over RM3.19m tax owed
KUALA LUMPUR: The government has served a winding-up petition on Eden Inc Bhd as it seeking RM3.19mil allegedly owed to the Inland Revenue Board (IRB) for the years of assessments 2013 and 2014.
Eden, which had transformed its core business from food and beverage to manufacturing and energy, said on Wednesday the petition served on it on Feb 13 was “unexpected” as it had been actively negotiating the payment terms with IRB and RM1.15mil had been paid so far.
The petition seeks to wind up Eden pursuant to Section 466(1)(e) of the Companies Act 2016 and an official receiver will be appointed as the interim liquidator.
The petition will see Eden having to bear the cost of winding-up from the assets of Eden; and any other order(s) which the court consider it as fair and reasonable.
“The tax liabilities mainly resulted from the advance rental for the period of 10 years from the year 2013 until 2023 amounting to RM9.8mil received and recognised as a deferred income in the year 2013,” it said.
Eden said it had been negotiating with the IRB and it had also been making the payments.
“It was unfortunate that a mutual agreement of the terms of the repayment could not be achieved.
“The repayment required was coincidently due at a time where the company was faced with challenging operational conditions as the power plants (which is the main income generator for the Eden Group of Companies (group) was not fully operational,” it said.
Eden explained the power plant was affected by floods in December 2014 and it had to channel its resources to ensure the facility was full recommissioned.
Another issue affecting the plant was that exensive repairs were required and hence, it could not operate continuously. Also the transmission lines to the national grid had been affected.
“The company expects that one of its power plants, namely its Kenerong plant will be fully operational by March 2018 and will result in an additional monthly net inflow to the Group of an estimated RM500,000.
However, Eden believed the alleged tax liabilities and/or the amount claimed by the government can be resolved before the next mention date of May 8, 2018.
It has identified the source of repayment was its piece of land in Gebeng Industrial area, Kuantan which could be compulsory acquired for the East Coast Rail Link (ECRL).
Eden was also in talks with relevant parties to dispose and/or jointly develop the Gebeng land under the company to monetise the company’s assets.
Eden was also in talks with IRB on the repayment plan based on the sources of funds identified.
It had engaged a solicitor and was seeking more meetings with IRB’s officer. The solicitor, it said, had sent an appeal letter dated Feb 14, 2018 to IRB where the solicitor has received positive indications from IRB that the latter will reconsider the appeal and the need to proceed with the petition.
“The solicitor has indicated that a formal reply from IRB will be issued within the next three weeks on the revised repayment plan; and
“The company will continue the periodic and/or monthly repayment to IRB to pending the finalisation of the revised repayment plan,” it said.
Eden said it expected a positive reply from IRB within the next three weeks, well before the mention date of May 8, 2018.
“The company has an unaudited net assets of RM250.91mil as at Sept 30, 2017 and is confident tit will be able to resolve the outstanding amount prior to May 8, 2018 based on the proposed sources of fund,” it said.