LAHORE-Morris Garages (MG) officials in Pakistan state that the rumours relating to under-invoicing are absolutely false and baseless and are nothing but a panic response to the tremendous success of the introduction of British automobile brand–‘MG’ in Pakistan.
The officials further states that MG JW Automobile (Pvt) Ltd (MG Pakistan) is a joint venture between JW SEZ (Pvt) Ltd and SMIL. SMIL owns the majority shares in the joint venture and is a subsidiary of SAIC, which is the largest auto manufacturer in China and the seventh largest in the world. In 2006, SAIC purchased the prestigious British brand “Morris Garages (MG)” and is now marketing automobiles under that brand all over the world.
Under Green Field Policy, SAIC’s joint venture company is setting up, a state-of-art local assembly plant for MG automobiles in Lahore.
The Financial Dictionary defines the expression under-invoicing as “The act or practice of stating the price of a good on an invoice as being less than the price actually paid” to evade customs duty. In Pakistan, the importers set up their own companies abroad, then get those companies to purchase products abroad and then the Pakistani company pretend to purchase and import that product from its own company abroad at a far lower price with the sole object of evading customs duty, something that is obviously illegal.
As per MG officials, MG Pakistan has indeed negotiated hard and has succeeded in purchasing MG HS directly from its principal/manufacturer (SAIC), for a price of just US $11,632 (corresponding MSRP RS5.449 million). Since the actual/declared price is paid to the principal (SAIC), hence, it cannot be called under-invoicing.
MG officials further state that the ultimate beneficiary of the negotiated price is valued customers, a rare phenomena in the Pakistani auto mobile sector. As per MG officials, no one has approached them to seek MG Pakistan views before spreading this rumour, otherwise MG Pakistan, being owned by a renowned business conglomerate, would have clarified this.
It is because of the above reason that the second leg of the rumor, i.e. FBR is investigating them for under-invoicing, is also totally false and baseless. FBR is not investigating any under-invoicing by MG Pakistan. MG Pakistan officials have requested all responsible citizens and prospective customers to approach MG Pakistan to seek any clarification relating to the products and business of MG Pakistan.
MG Pakistan is of the view that without verifying any fact and spreading false news is not only unethical, against journalistic norms and damaging for the emerging auto industry of Pakistan but it may also entail serious legal consequences should MG Pakistan decide to resort to legal action.
MG Pakistan officials further state the company has honoured and will continue to honour its commitments and the company also ensure its customers and business partners of its unwavering commitment to serve the automobile industry of Pakistan by promoting competition and higher value at lower prices.