By IZZAT RATNA
MK land Holdings Bhd expects to resolve the RM80.7 million backdated tax bill slapped on its subsidiary very soon, said group CEO K Mohanachandran.
Appointed to lead MK Land in February this year, he said the Inland Revenue Board’s (IRB) tax setback will not have a significant impact on the company’s growth and strategic plans.
“The IRB is doing its job. As far as we are concerned, we have actually followed all the standard accounting procedures in reporting all our revenues and in paying the necessary taxes.
“And we are not the only company in the country that has been hit by this tax bill, but we are working towards resolving it with IRB very soon,” he told The Malaysian Reserve when met for an exclusive interview recently.
The mid-sized developer’s wholly owned subsidiary, Saujana Triangle Sdn Bhd (STSB), was slapped with an RM80.77 million backdated tax by the IRB last month.
The company was served with notices for additional taxes of RM55.7 million and a 45% penalty of RM25.07 million in relation to assessment years from 2009 to 2011 and 2013.
The additional income tax and penalty were related to gains from a land disposal held under investment properties in the assessment year of 2009 — which is accounted as revenue and not capital.
Despite the financial setback, Mohanachandran said MK Land was moving forward with its business plan to boost revenue, expand the size of gross development value (GDV) and seek more opportunities outside its comfort zone.
He said the group was already targeting sales of between RM500 million and RM1 billion by 2022, with over RM1.2 billion worth of residential developments set to be launched over the next two years.
MK Land shot to fame after the successful development of Damansara Perdana, once an Orang Asli reserve land on the outskirts of Kuala Lumpur and bordering the prestigious Taman Tun Dr Ismail.
The company acquired the land in 2002. Today, the area houses high-end condominiums, business towers, shop- ping complexes and posh residential addresses.
MK Land plans to launch the Rafflesia, phase two of semi-detached homes by the end of this year. The property, estimated to be worth RM100 million, sits on 2.02ha site and each unit would be sold between RM3.5 million and RM4 million.
The group will also launch a serviced apartment on a 1.69ha of land with a GDV of between RM400 million and RM500 million. Both projects are within the Damansara Perdana enclave.
Mohanachandran said 60% of the buyers for their development are owner-occupiers, while the remaining 40% are local investors.
“We have a very small number of foreigners in our profile that is not even significant to state,” he said.
MK Land has about 1,821ha of undeveloped land with an estimated value of RM5 billion located in the Klang Valley, Ipoh, Kedah and Perak. “Unlike other developers who are looking at going very big, we believe we have to be a bit cautious as a group and to not overreach in our projections.
“In the past, 65% of our developments have been on the affordable segment, while 35% are in high-end and commercial segments,” he said.
He also does not expect MK Land to further flood the market with commercial launches due to the oversupply in the retail segment.
“It is very important to leverage on our strength in order to achieve commendable sales, as well as to fulfil the demand for affordable housing,” he said.
Mohanachandran revealed that the group would remain a local player, with no immediate plan to expand abroad.
“I think if we start to move too fast and try to do sales of over the RM1 billion mark, after some time the domestic market would not be able to accommodate the scale of your company and the only option is to venture abroad.
“We are a bit cautious about it — unless there are some really very good offers that we cannot resist.”