Anaam CEO says objection to ZATCA’s SAR 106.9 mln claims based on ‘limitation principle’

Logo of Anaam International Holding Group

Anaam International Holding Group objected to the Zakat, Tax and Customs Authority (ZATCA)claims to pay SAR 106.93 million in Zakat arrears and differentials for 1995-2011, based on the “limitation principle” that does not entitle ZATCA to retroactively claim these differentials for a period of over five years, Chief Executive Officer (CEO) Hassan Yamani told Argaam in a telephone interview.

Anaam has some reservations about the positive financial impact of SAR 33 million resulting from the Committee for the Resolution of Tax Violations and Disputes’ decision on accepting some of the company's objections, as the decision could be issued on a higher or lower amount.

As the committee accepted the “limitation principle”, on which Anaam’s lawsuit is based, the financial impact will fully reflect on the company’s financial results at SAR 106 million – the entire Zakat provision.

The Zakat provision worth SAR 106.93 million was allocated after the approval of Anaam’s extraordinary general meeting (EGM) for a capital cut plan, Yamani said, noting that the company will appeal the committee’s decision within 30 days.

Moreover, the CEO expects the financial and legal due diligence required for the acquisition of a 51% stake in Wasit Factory for Entertainment & Beauty Systems to be completed within the next few days.

The company is currently working on completing the paperwork required for raising its capital through a rights issue, Yamani noted, expecting these procedures to be finalized in a few weeks.

For Anaam’s full acquisition of Al Takamul National Agriculture Co., Yamani said: “Based on Al Takamul shareholders’ request, new shares will be issued in Anaam. The deal will be closed six months after the capital increase. Therefore, the acquisition will be finalized next year.”

Last February, Anaam’s board of directors recommended raising capital through SAR 210 million rights issue, Argaam earlier reported.