PETALING JAYA • In an unusual move to get back taxes, Malaysia's inland revenue department is said to have seized RM126 million (S$41 million) from a fixed deposit account of the controlling shareholder of property group Country Heights Holdings Berhad (CHHB), The Star reported yesterday.
The money was placed by Tan Sri Lee Kim Yew, a top tycoon during the era of then Prime Minister Mahathir Mohamad, in a foreign- owned bank based in Malaysia.
The Inland Revenue Board (IRB) seized the account as the businessman owes the government RM22.5 million through a subsidiary of CHHB, Country Heights Sdn Bhd, according to the parent company's filing to the Malaysian stock exchange on Tuesday.
CHHB is known for developing posh residential projects with the brand name Country Heights.
It also developed The Mines Resort and Golf Club at the edge of Kuala Lumpur, a mall next to it, as well as a hotel that was often used for government functions during the Mahathir era - Palace of the Golden Horses.
The CHHB unit, Country Heights Sdn Bhd, was ordered by the Shah Alam High Court in December last year to pay the government tax arrears incurred in 1997 and 1998.
CHHB said then that it was appealing to the Finance Minister against the decision, as the tax liabilities were incurred during the Asian financial crisis in those two years.
It had also noted then that three other subsidiaries of CHHB had settled their taxes totalling RM10.76 million in December.
The Edge newspaper reported that, last December, Mr Lee had loaned CHHB RM10.76 million, interest free, to settle tax liabilities of the three units in a lump sum payment to the taxman.
In Tuesday's filing to Bursa Malaysia, Mr Lee, 62, said he has requested a confirmation from the taxman of the seizure.
He also queried whether the seized funds have been, or would be, applied to settle the tax liability.
The IRB has yet to respond, he said, according to The Star daily.
Despite the absence of an acknowledgement from the taxman, Mr Lee told Bursa, the country's stock exchange, that he is agreeable to allow the fixed deposit to be used to settle the back taxes.
This is conditional on CHHB accepting that the money came from his personal account, and that the company will pay him back the amount when it has enough funds to do so. The sum would be non-interest bearing, he added.
The board of CHHB, which he chairs, met on Tuesday and agreed on the settlement, the newspaper report said.