Robi Axiata avoids stamp duty of Tk28 crore: Bangladesh Bank

Robi Axiata Limited, the second-largest mobile telecom operator in Bangladesh, has been experiencing difficulties repatriating profits to its foreign investor in Singapore for over a year due to regulatory objections regarding stamp duty avoidance. 

The Bangladesh Bank has detected that the company evaded stamp duty to the tune of Tk28.49 crore on transferring shares among foreign investors. The issue was raised by the central bank more than a decade after the shares were transferred, putting the company in trouble regarding sending back its dividend to foreign investors. 

Under the Companies Act 2013, stamp duty must be paid for any transaction involving a transfer deed, such as the exchange or transfer of shares and the change in ownership of property. Shares are defined as movable property according to the company's by-laws. 

Two non-resident shareholders, Warid Telecom International and Bharti Airtel Holdings (Singapore), transferred shares to each other in 2010 and 2013, according to the Bangladesh Bank. 

The transfer value for each share was fixed at Tk0.06 in 2010 and Tk45.21 in 2013, with Airtel paying a stamp duty of Tk9.36 crore against the share transfer value.

However, after 12 years, the Bangladesh Bank raised the issue that the transfer value was not fair, and the company will have to pay stamp duty based on face value. If face value is considered, the company will have to pay an additional Tk28.49 crore.

Although the share transfer took place before the amalgamation between Airtel and Robi Axiata, the central bank says Robi Axiata will have to pay this additional stamp duty if it wants to repatriate profits because Bharti Airtel had an investment in Airtel and got a share of Robi Axiata after the amalgamation.

Robi Axiata declared a 5% cash dividend for the year 2021 after listing with the Dhaka Stock Exchange (DSE) in 2020. However, its foreign partner, Bharti International (Singapore), has not yet been able to repatriate its profit.

Robi Axiata, which brought the highest foreign direct investment in the telecom industry in Bangladesh in the five years till 2016, has declared a 7% cash dividend for the year that ended on 31 December 2022. 

Its shares have remained stuck at the floor price of Tk30 each since August last year on the Dhaka Stock Exchange (DSE).

When contacted, Shahed Alam, head of corporate affairs at Robi Axiata, said the share transfer was approved by the Registrar of Joint Stock Companies and the Bangladesh Telecommunication Regulatory Commission.

He also mentioned that the company had successfully repatriated profit to its foreign investors after amalgamation in the past. However, the recent stamp duty issue raised by the central bank has delayed profit repatriation for over a year and has been creating a negative impression among foreign investors about the country, he added.

Other foreign investors who have invested in Bangladesh have also been facing difficulties in profit repatriation due to the dollar crisis, leading to a drastic fall in disinvestment.

Disinvestment in equity capital declined by 51.22% to $28.78 million in the January-September period of last year from $59 million in the same period of the previous year. Disinvestment includes capital repatriation, reverse investments, loans given to parent firms, and repayments of intra-company loans to parent firms.