Genting drops Malaysian lawsuit over taxes

Genting Malaysia had filed a judicial review against the Malaysian government over promised tax incentives but decided to withdraw it over the last few days.

Malaysia.- Genting Malaysia Bhd announced its decision to withdraw a judicial review against the Malaysian government. Genting’s Malaysian lawsuit challenged a decision over promised tax incentives for its multi-billion-dollar revamp plan for the Resorts World Genting.

The company announced its board’s decision in a filing to Bursa Malaysia. Such information caused brokerages to lower its estimates on the company’s earnings for 2019 and 2020.

The revamp – called the Genting Integrated Tourism Plan (GITP) – consisted of a 10-year €2.1 billion plan.

Genting Malaysia had submitted an appeal to the Ministry of Finance, which didn’t succeed. Afterwards, the High Court in Kuala Lumpur had granted leave to commence a judicial review on the tax issue. It also granted a stay of that decision, “pending disposal of the judicial review application before the High Court.”

A Thursday note from Maybank IB Research flagged that the casino operator’s decision to withdraw the appeal would “lead to higher corporate tax rates in the near future.”

“We lower our fiscal years 2019 and 2020 earnings-per-share estimates by 9 per cent per annum but tweak our fiscal year 2021 earnings-per-share estimate upwards by 2 per cent,” analyst Samuel Yin Shao Yang said.