22/09/2025

BIZ & FINANCE MONDAY | SEPT 22, 2025

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What constitutes ‘control’ in transfer pricing?

Lianson Fleet to acquire two bulk

carriers for RM115m PETALING JAYA: Lianson Fleet Group Bhd, formerly known as Icon Offshore Bhd, announced that its indirect wholly owned subsidiaries Melisar Corporation Pte Ltd and Gimsar Corporation Pte Ltd have signed two memorandums of agreement for the acquisition of MV Pacific Ace and MV Pacific Pride for RM115.1 million. The latest acquisitions follow the purchase of MV Moana BAQ in August, bringing Lianson Fleet’s total bulk carrier count to three. The three acquisitions are expected to be completed by the end of October and will be financed with a combination of internally generated funds and bank financing. Upon completion of the acquisitions, the group’s marine transportation fleet will expand to 39 vessels, comprising 17 barges, 17 tugboats and five bulk carriers. This milestone aligns with Lianson Fleet’s strategic objective to diversify beyond the offshore support vessel (OSV) segment and strengthen its recurring income streams. By focusing on long-term charter asset classes, the group aims to enhance earnings visibility and reinforce its position as a leading maritime asset player. Lianson Fleet executive chairman Lim Chern Wooi expressed positivity about entering the next phase of the company’s growth journey, having successfully evolved beyond a pure-play OSV operator. “The acquisitions mark a pivotal step forward, enabling us to strengthen our position in the marine transportation sector and tap into new opportunities across Southeast Asia,“ he said in a statement. KUALA LUMPUR: The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to trade with a bullish bias this week given the recent strength in export performance, a dealer said. Palm oil trader David Ng said the positive sentiment will continue to provide positive momentum to market sentiment and sustain buying interest among traders. “We expect CPO prices to trade between RM4,330 and RM4,450 per tonne (this week),” he told Bernama. Meanwhile, Interband Group of Companies senior palm oil trader Jim Teh said CPO futures will likely trade between RM4,000 and RM4,200 per tonne. “As a whole, CPO futures have been performing excellently as compared to crude oil prices, which have been in decline lately. The physical demand for palm oil would come from China, India, Pakistan, the Middle East, Europe, and the United States,” he said. Bursa Malaysia Derivatives was closed for two days last week, on Monday and Tuesday, in conjunction with Malaysia Day, and resumed trading on Wednesday. On a weekly basis, the October 2025 contract fell RM43 to RM4,365 per tonne, November declined RM49 to RM4,396, December dropped RM45 to RM4,425, January 2026 slipped RM40 to RM4,442, and February 2026 lost RM37 to RM4,434. September 2025 and March 2026 stood at RM4,383 and RM4,404 per tonne, respectively. Weekly trading volume shrank to 264,468 lots from 527,663 lots previously, while open interest fell to 260,581 contracts from 263,070 contracts. Dealer forecasts bullish trading for CPO futures

T RANSFER pricing is triggered when ever there are transactions between associated persons where one party has control over the other, or where both parties are con trolled by a third party, or are rela tives of each other. Determining whether there is control in a transaction between parties is fundamental. If there is no control, the issue of transfer pricing doesn’t arise, and the transaction becomes an arm’s length transaction because the transaction will be regarded as having taken place between parties who are unconnected with one another. The general perception of control is that one has to own more than 50% of the other enterprise or must have direct or indirect control of the business of the enterprise. The law dealing with the word “control” is mostly prescriptive and the analysis should start dealing with the prescriptive requirements in the law, and where it is still uncertain, then the subjective requirements to define “control” have to be examined. Prescriptive requirements of control If one party has more than 50% ownership of the issued share capital and is able to exercise control over the affairs of the company, then he will be deemed to have control over the company. Control is not limited to just one party, and it can be jointly controlled by up to ISKANDAR PUTERI: Budget 2026 is expected to include policies aimed at boosting investment inflows, upgrading automation and digitalisation and increasing the number of lucrative jobs for Malaysians. Deputy Investment, Trade and Industry Minister Liew Chin Tong said the ministry has submitted its proposals to the Finance Ministry, but the final call is to be made by Prime Minister Datuk Seri Anwar Ibrahim when he presents the budget on Oct 10. “The government’s direction is clear. We want to create better jobs for Malaysians and push our industries towards greater adoption of automation, artificial intelligence (AI) and digitalisation,” he told reporters after launching the Good Job Career Fair at the University of Reading, EduCity, here on Saturday. Liew said the broader goal is to accelerate Malaysia’s transition into a technology-driven economy. “We want to move from being known as a trading nation to one that creates and innovates. The shifting must be from ‘Made in Malaysia’ to ‘Made by Malaysia’, with more intellectual property and innovation originating here,” he said. Meanwhile, Liew noted that despite global economic headwinds, Malaysia had managed to surpass RM1 trillion in exports. He said this was partly due to companies that relocated to Malaysia under the China Plus One strategy over the past two to three years, many of which are currently producing goods here, which has contributed to Malaysia’s exports. On Friday, the Ministry of Investment, Trade and Industry announced that Malaysia’s trade performance in the first eight months of

also exist if the 20% shareholder has the power to appoint directors to the board of directors of the company. The subjective element of control The subjective element arises here because control can also be indirect over the company’s affairs. In such a situation, even when the shareholding is nominal, the shareholder may have de facto control through other means such as shareholder agreements that restrict other shareholders from exercising control without consent of the nominal shareholder. There could be negative covenants built into the constitution that allows the nominal shareholder to control the activities of the company. In determining control, it is important to look at the underlying documents and agreements to determine the true nature of control. It is also common to find groups of companies controlled by the same individual shareholders without a common holding company structure. Since the same share holders are involved in all the companies, such arrangements would be regarded to be under common control of the family, and therefore transactions between the companies would fall within the transfer pricing regime. This article is contributed by Thannees Tax Consulting Services Sdn Bhd managing director SM Thanneermalai (www.thannees.com).

five persons, provided they jointly or together with their nominees are able to exercise control over the company’s affairs. In determining control in the above paragraph, the share holders either on their own or jointly must own or be entitled to acquire more than 50% of the issued share capital of the company, or receive a greater part of any income upon distribution to the shareholders, or in the event of a winding up, receive greater part of the assets upon distribution to the shareholders. Where there is a joint venture or a consortium, transactions between members of the joint venture or consortium and the joint venture/consortium will be covered under the meaning of control and therefore such transactions will be subject to the transfer pricing regulations. The next prescriptive rule is the 20% ownership rule. Here, control refers to a person who owns 20% or more of the share capital of the company, and the business depends on the proprietary rights such as patents, non patented know-how, trademarks, or copyrights provided by the other person. Control will also exist if the person has at least 20% ownership of the company and has influence over the business activities of the company, this could involve sales, purchases, provision or receipt of services, by the other person. Control could

Liew: Budget 2026 expected to focus on investments, automation and better jobs

Liew (second, right) visiting one of the exhibition booths at the Good Job Career Fair at the University of Reading, EduCity, in Iskandar Puteri on Saturday. – BERNAMAPIC

RM1 trillion mark in August, one month earlier than in 2024, with electrical and electronic products, machinery, optical and scientific equipment, as well as palm oil and related products leading the way. – Bernama

2025 grew by 3.8% year-on-year to RM1.98 trillion. Exports rose by 3.9% to RM1.03 trillion, while imports climbed 3.6% to RM945.62 billion. The ministry said exports breached the