Company Briefs: LMIR Trust

LMIR Trust

The manager of Lippo Malls Indonesia Retail Trust (LMIR Trust) said the latest withholding tax laws in Indonesia may have a "material impact" on the trust.

It said the Indonesian government had earlier this year passed certain amendments to tax rules relating to land use and building leases. Under the new rules, all income earned from building leases will be hit by an income tax at 10 per cent of the total value of the building lease that now includes service charges and utilities recovery charges.

This tax treatment also applies to land.

Previously, property owners did not have to pay income tax on such charges.

LMIR Trust said that, currently, certain maintenance services for its properties are outsourced to a third-party service provider. This provider would collect service charges and utilities recovery charges from the tenants.

With the latest rule, tenants must now withhold income tax on such charges.

Midas Holdings

Troubled railway parts maker Midas Holdings has received a letter of demand over a 400 million yuan (S$83.5 million) loan to its subsidiary that was guaranteed by Midas, its former executive chairman Chen Wei Ping, and a third company, North East Industries.

The loan from Advanced Manufacturing Industry Investment Fund was given out to Midas' unit, Jilin Midas Aluminium Industries.

"The guarantee was not reported to the board and the board became aware of the guarantee only after sighting the letter," Midas said.

The loan agreement allows early redemption by giving 45 days of notice from the date of the letter to the borrower and the guarantors.

Midas said if the borrower and the guarantors fail to repay the loan after 90 working days from the date of the letter, additional penalty will be imposed.

ST Engineering

The aerospace arm of ST Engineering said it secured some $510 million in new contracts - ranging from heavy maintenance to engine wash - in the first quarter.

ST Aerospace was awarded the heavy maintenance contracts by "North American operators" to support their Boeing 757 and 767 fleet.

The company has also been awarded contracts from a number of customers for its EcoPower engine wash solution, which ST Aerospace said has been expanded to include engine manufacturer CFM International's Leap engine.

A version of this article appeared in the print edition of The Straits Times on April 12, 2018, with the headline 'Company Briefs'. Print Edition | Subscribe