Astro said notices were served on the company’s wholly-owned subsidiaries, Astro Shaw Sdn Bhd and Measat Broadcast Network Systems Sdn Bhd, on July 9 for additional taxes amounting to RM22,011,627 and RM712,865,984 respectively.

“The notices were served pursuant to the disallowance of production costs incurred during the mentioned years,” the pay-TV operator said in a Bursa filing yesterday.

It is understood the tax bill is roughly equivalent to half of Astro’s market capitalisation.

Astro’s shares plunged to a new all-time low this morning on the news.  The stock fell as much as 10% or 3 sen to 28 sen before paring some of its losses in the afternoon session.

At 3.10pm it was down 2 sen or 6.5% at 29 sen, valuing the group at RM1.49 billion. It has fallen 23.7% year-to-date and 45.1% over the past one year.

The two subsidiaries were given 30 days from the date of the notices to appeal against LHDN’s decision.

Astro said based on legal advice, both subsidiaries had fair and reasonable grounds to appeal against the notices.

“Therefore, both companies intend to appeal and, if required, initiate legal proceedings to challenge the basis and validity of the notices,” the firm said.