Hub Power Company's (Hubco) shareholders may face a delay in receiving interim dividend after the Federal Board of Revenue (FBR) issued notices to banks to freeze the firm's accounts. Hubco had announced an interim dividend of Rs 3 per share, which was to be dispatched by the company.
However, before the dividend warrants could be dispatched, the Islamabad High Court delivered a judgement dismissing the appeals of the company against the levy of tax by FBR on the issuance of shares against the project's development costs, a document sent to the Karachi Stock Exchange said on Tuesday.
Immediately after the announcement of the judgement, the FBR issued notices under the Income Tax Ordinance of 2001 to banks with which the company maintains its accounts, including the one through which it pays dividend to its shareholders, directing them to remit all funds available in the bank accounts, for and on behalf of the company to the Deputy Commission, Inland Revenue Enforcement - V, Large Taxpayers Unit, Islamabad. "Following our discussion with FBR, it (the FBR) withdrew the notices on March 28, 2012, but on March 31, the FBR again issued notices to banks (and) as such the accounts cannot presently be used," the company said.
The Hubco had filed appeals before the Supreme Court of Pakistan along with a stay application to restrain the FBR from taking any coercive action until a decision by the apex court. Under the circumstances, until such time the company obtains an interim order from the Supreme Court, restraining the FBR from taking any action against the company, it is constrained to delay the payment of dividend to its shareholders. The Hubco also sought the SECP's permission to delay the payment of dividend and assured that the company was taking all possible measures to pay dividend to its shareholders as soon as possible.