Axiata Group Berhad - Annual Report 2016

FINANCIAL STATEMENTS

Axiata Group Berhad | Annual Report 2016

227

36. CONTINGENCIES AND COMMITMENTS (CONTINUED)

XL has committed to pay annual fees within ten (10) years, as long as XL holds the 3G license. The amount of annual payment is based on

the scheme of payment set out in Regulation No. 07/PER/M.KOMINFO/2/2006 of the Minister of Communication & Information and Decree

No.323/KEP/M.KOMINFO/09/2010 of the Minister of Communication & Information. No penalty will be imposed in the event that XL returns

the license.

(d) List of contingent liabilities of subsidiaries of the Group as at 31 December are as follows:

Description

Potential exposure

2016

RM’million

2015

RM’million

CelcomTrading Sdn Bhd [formerly known as RegoMulti-Trades Sdn Bhd] (“CelcomTrading”)

vs Aras Capital Sdn Bhd (“Aras Capital”) and Tan Sri Dato’ Tajudin Ramli (“TSDTR”)

In 2005, Celcom Trading, a wholly-owned subsidiary of Celcom Resources Berhad [formerly known

as Technology Resources Industries Berhad] (“Celcom Resources”), commenced proceedings

against Aras Capital and TSDTR for amounts due to Celcom Trading pursuant to an investment

agreement with Aras Capital and an indemnity letter given by TSDTR. TSDTR filed its defence and

instituted a counterclaim against Celcom Trading, Celcom Resources and its directors to void or

rescind the indemnity letter and claim damages.

The Board of Directors, based on legal advice received, are of the view that it has good prospects

of succeeding on the claim and successfully defending the counterclaim if both were to proceed

to trial.

100.0

VIP Engineering and Marketing Limited (“VIPEM”) vs Celcom Resources on TRI

Telecommunications Tanzania (“Tritel”)

In December 2001, vide Civil Case No. 427 of 2001, VIPEM claimed a sum of USD18.6 million from

Celcom Resources as its share of loss of profits for the mismanagement of Tritel, a joint venture

company between Celcom Resources and VIPEM. In light of the winding-up order made against

Tritel, Celcom Resources filed its claims of RM123.4 million with the liquidator of Tritel in July 2003.

The Board of Directors, based on legal opinion received, are of the view that the allegations

of mismanagement, are rhetorical and unsubstantiated. In view of the winding up proceedings,

there is also a possibility that VIPEM will not pursue its claim.

63.7

Celcom (Malaysia) Berhad [now known as Celcom Axiata Berhad] (“Celcom”) &

Technology Resources Industries Berhad [now known as Celcom Resources Berhad]

(“Celcom Resources”) vs TSDTR & 6 others (Conspiracy Suit)

In 2008, Celcom and Celcom Resources initiated a claim against five (5) of its former directors,

DeTeAsia Holding GmbH, and Beringin Murni Sdn Bhd (“Defendants”) for conspiring with each

other to injure Celcom and Celcom Resources by causing and/or committing them to enter

into various agreements in relation to certain rights issue shares in Celcom Resources. Celcom

and Celcom Resources are seeking damages for conspiracy against the Defendants. Two of the

Defendants, TSDTR and Dato’ Bistamam Ramli (“DBR”) filed a counterclaim against Celcom and

Celcom Resources for damages for breach of an alleged global settlement involving, inter alia, the

present action, and also for conspiracy and misrepresentation in inducing TSDTR to withdraw a

counterclaim in another suit.

The Directors, based on legal advice received, are of the view that it has good prospects of

successfully defending the counterclaim.

7,215.0