Tuesday, October 2, 2018

FAR - Petronas : Amie Bensouda's law firm fight to exempt FAR from paying capital gains

According to Africa Intelligence trade paper, the legal firm, Amie Bensouda and Co., whose principal partner is currently the Lead Counsel of the Commission of Inquiry into the illicit wealth of the former Gambian dictator, has been busy in court to prevent FAR from paying capital gains tax.

The Australian oil and gas exploration and development company has recently partnered with Petromas, the Malaysian state oil company, by selling 40% share in offshore Gambian Blocks A2 and A5. 

The 40% stake was sold in February to Patronas.  But in May, a new Gambian law came into effect that requires companies to pay, when selling an asset, a hefty capital gains tax.  The corporate lawyers at Amie Bensouda and Co. are arguing that their client, FAR, should not be required to pay capital gains tax on the proceeds of the sale of its 40% share in Blocks A2 and A5 because the sale took place before the law came into effect. 

Mr. Jerreh Barrow, the Commissioner of Petroleum is said to be handling the case on behalf of the government of Adama Barrow with the legal support of Bryan Cave and Berwin Leighton Paisner law firm with Alexander Sarac, the firm's partner responsible for Projects, Energy and Infrastructure Finance. 

If the legal challenge mounted by Amie Bensouda and Co. fails, the sales proceeds subject to capital gains tax, according to Africa Intelligence, will affect FAR's future exploration expenses as well as a small cash portion of several million dollars.