• Thu
  • Aug 28, 2014
  • Updated: 12:08am

Li Ka-Shing

Often referred to as “Superman” in Hong Kong because of his business prowess, Li Ka-shing is the richest businessman in Asia, and chairs conglomerate Hutchison Whampoa and Cheung Kong Holdings, a property group. Li turned Cheung Kong Industries into a top property group, and Cheung Kong expanded to acquire Hutchison Whampoa in 1979 and Hongkong Electric in 1985. Li is a noted philanthropist and heads a charitable foundation that is a shareholder in Facebook.

NewsHong Kong
AUSTRALIA

Australia demands A$892 million from Li Ka-shing firms in unpaid taxes

One company involved vows 'vigorous challenge' to claim; judge slams 'questionable practices'

PUBLISHED : Saturday, 05 October, 2013, 12:00am
UPDATED : Monday, 07 October, 2013, 4:46pm

The Australian government is expected to take tougher tax measures against Li Ka-shing's companies after demanding A$892 million (HK$6.5 billion) from them - but Asia's richest man is fighting back.

Li's companies have invested billions of dollars in power, infrastructure and agricultural assets in Australia, making him the biggest single investor in that country.

The Australian Taxation Office (ATO) is seeking A$116 million in unpaid taxes from Cheung Kong Infrastructure (CKI), a Hong Kong-listed infrastructure firm controlled by Li, The Australian reported yesterday.

This is on top of A$380 million that CKI has been asked to pay the tax office, also for unpaid taxes and penalties, and A$396 million that Li's Hong Kong-listed Power Assets Holdings has to pay the tax office, according to recent judgments.

A tax office spokeswoman declined to comment on Li's companies but told the South China Morning Post: "The tax practices of multinationals is an area we are actively focusing on."

An equity analyst who did not want to be identified said: "The Australian government in future may take a harsh line on tax evasion towards companies like CKI. It may want to close the tax loopholes."

On March 14, Chris Jordan, who was appointed Australian Taxation Commissioner on January 1, said the tax office would take a more active stand against tax evasion by multinationals. He said: "I want businesses to clearly know if they choose questionable or very aggressive [tax] practices, there will be consequences."

On the A$380 million demanded in the Australian judgment, a CKI spokeswoman said: "CKI has obtained legal advice and intends to vigorously challenge the ATO position." She did not comment on the additional A$116 million demand.

According to court documents, CKI did not pay Australian taxes, or penalties for unpaid taxes, from 2000 to 2009. CKI's failure to respond prompted a judge to issue a default judgment against the firm.

"The entering of judgment in default against a party for non-compliance with orders is a step of the utmost seriousness," said Justice Michelle Gordon.

"CKI has not only failed to comply with an order of the court, but an order that reinforced an important rule that a respondent who has been served with an originating application must file a notice of address for service.

"CKI's failure to take that step is continuing and occasioning unnecessary delay and prejudice to the [taxation] commissioner. It is appropriate to enter judgment in default against CKI," she said.

The A$496 million of taxes demanded of CKI was 38.5 per cent of its net profit of HK$9.43 billion last year, while the A$396 million demanded of Power Assets was 29.8 per cent of the latter's net profit of HK$9.73 billion.

The share price of CKI fell 1.1 per cent to HK$54.30 yesterday, while the share price of Power Assets dropped 0.2 per cent to HK$67.90.

Shares in Cheung Kong (Holdings), Li's Hong Kong-listed conglomerate, dropped 1.4 per cent to HK$123.20.

Share

Related topics

For unlimited access to:

SCMP.com SCMP Tablet Edition SCMP Mobile Edition 10-year news archive
 
 

 

4

This article is now closed to comments

liambussell@hotmail.com
LKS actually looks like he sucks the life force out of small children in this picture, like some ancient Daoist Wizard. Or is it just the blood of the Hong Kong People he drinks?
rpasea
Taxes are for little people.
wingchi1000
Good job for the Australian government! The move is obviously a signal for Mr. Li the way he’s used to going through in business actually doesn’t work out of Hong Kong. Besides, it also reflects that this guy has probably been evading a huge amount of tax being sucked from our Hong Kong people, like a vampire does. Could he still have the edge out of the city? I think Hong Kong is only place he can wield enormous influence on the government so as to suck lots of money. Let’s make him pay it!
lamlm38
greed is good! coming from HK's Gordon Gekko a.k.a LKS :) if he ever pays the fine he will make HK ppl pay later..
 
 
 
 
 

Login

SCMP.com Account

or