Cheung Kong Infra, Power Assets Sued Over Australia Tax
Cheung Kong Infrastructure Holdings Ltd. (1038) and Power Assets Holdings Ltd. (6), controlled by Asia’s richest man Li Ka-Shing, were sued by Australia over unpaid taxes, interest and penalties of A$760 million ($705 million).
The two companies owe taxes from 2000 to 2009, according to complaints filed June 14 in federal court in Melbourne. Cheung Kong Infrastructure and Power Assets are the primary electricity network owners in Victoria, holding a 51 percent stake in two distribution networks, according to the Australian power regulator. They also have a 200-year lease on South Australia’s distribution network.
Australia’s Deputy Commissioner of Taxation sought a court order for Cheung Kong Infrastructure to pay A$305 million in taxes and interest and administrative penalties of A$67.8 million, according to the filing. The tax agency sought an order against Power Assets to pay A$316 million in taxes and interest and A$71.8 million in administrative penalties.
Both companies deny owing the taxes, according to Wendy Tong Barnes, a spokeswoman at Cheung Kong Infrastructure. The agency’s claims are “without foundation” and the companies will defend against the lawsuit, Tong Barnes said in an e-mailed statement today.
The companies haven’t filed statements of defense, according to the court’s website.
Cheung Kong Infrastructure and Power Assets have a 51 percent stake in the Powercor and CitiPower distribution networks in Victoria, according to the federal government’s 2012 State of Energy report. They plan to invest A$1.6 billion between 2011 and 2015 in Powercor, Victoria’s largest electricity distribution network, which operates about 85,000 kilometers of power lines, the report showed.
The two companies also hold a 51 percent stake in South Australia’s only electricity distribution network, SA Power Networks, which runs 87,000 kilometers of lines. They plan to invest A$2.23 billion in the system over the same period, according to the report.
Spark Infrastructure Group owns the remaining 49 percent of the three networks. Cheung Kong Infrastructure has an 8.5 percent stake in Spark, according to data compiled by Bloomberg.
Li has a current net worth of $25.2 billion, ranking him 21st on the Bloomberg Billionaires Index.
The cases are DCOT v Cheung Kong Insfrastructure Holdings Ltd. VID515/2013 and DCOT v Power Assets Holdings Ltd. VID516/2013. Federal Court of Australia (Melbourne).
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