India court frees Nokia plant for Microsoft sale

Dec 12, 2013
A passer-by talks on his mobile phone outside a Nokia store in New Delhi on October 1, 2013

An Indian court Thursday released a major plant owned by Nokia seized over a multi-billion-dollar tax row, paving the way for the Finnish firm to include the factory in the sale of its mobile business to Microsoft.

Nokia's Chennai plant in southern India is one of the Finnish giant's biggest manufacturing factories and was due to be taken onto Microsoft's books Thursday as part of the $7.2-billion sale to the US tech giant.

"The court has accepted the company's offer of a security deposit," income department lawyer Mohan Parasaran told AFP, allowing Nokia to sell the plant to Microsoft.

The Delhi High Court said that Nokia could complete the transfer of the factory to Microsoft after it pays 22.5 billion rupees ($365 million) in taxes, a sum Nokia offered earlier.

The Finnish company had asked the Delhi High Court earlier this week to lift a freeze on transfer of its assets—so it could hand over the Chennai plant under its agreement to sell its operations to Microsoft.

Parasaran said the ultimate tax bill faced by Nokia could amount to 211.53 billion rupees ($3.4 billion) including "existing and anticipated tax liabilities." He did not elaborate.

The Finnish firm is among a string of multinationals facing tax problems in India, including Cadbury, Royal Dutch Shell and Vodafone.

Nokia told AFP in an email Tuesday it had not received any formal claim from Indian authorities for $3.4 billion in back taxes, but vowed to defend itself "vigorously" against any such demand which it described as "without merit".

"Nokia has not been served with any claim beyond what it received in February," the company said. That demand totalled 20.80 billion rupees ($340 million).

The Finnish company, which is selling its mobile phone division to focus on making network equipment, had said the plant might have to be excluded from the sale to Microsoft if the court did not release it.

The tax department told the Delhi High Court that Nokia India and Nokia Corp owed it money for alleged tax evasion stretching over seven years from 2006-2013.

A Nokia spokesman told AFP that the company was "still analysing" the court ruling and did not have any immediate comment.

Explore further: Sony's PlayStation back online after Christmas hack

add to favorites email to friend print save as pdf

Related Stories

Microsoft to take over Nokia HQ in 2014 after deal

Nov 21, 2013

Nokia says its headquarters near the Finnish capital will be taken over by Microsoft on completion of the sale of its cellphone and services division to the U.S. software company, expected in early 2014.

EU warns Nokia not to become 'patent troll'

Dec 09, 2013

Europe's top regulator has warned Nokia not to try to become a "patent troll" after the Finnish company sold most of its cellphone-making business to Microsoft Corp. this year but retained its patent portfolio.

Nokia to pay outgoing CEO Elop $25 million

Sep 19, 2013

Nokia Corp. says it will pay outgoing CEO Stephen Elop a compensation package of some $25 million (19 million euros) when he leaves the company to move over to Microsoft.

EU clears Microsoft Nokia mobile phone deal

Dec 04, 2013

The European Commission approved on Wednesday Microsoft's nearly 5.5-billion-euro takeover of the mobile phone business of Finland's Nokia which once dominated the global industry.

Recommended for you

Sony's PlayStation 'gradually coming back'

Dec 27, 2014

Sony was still struggling Saturday to fully restore its online PlayStation system, three days after the Christmas day hack that also hit Microsoft's Xbox, reporting that services were "gradually coming back."

Uber broke Indian financial rules: central bank chief

Dec 27, 2014

India's central bank chief lashed out at Uber, already under fire over the alleged rape of a passenger, saying the US taxi-hailing firm violated the country's financial regulations by using an overseas payment ...

Taxi app Uber defies ban in Spain

Dec 26, 2014

Smartphone car-ride service Uber vowed Friday to keep operating in Spain despite a ban following a lawsuit by taxi drivers and said it would fight the case in court.

Sony film mess reflects gadgets-entertainment gap

Dec 26, 2014

Sony's iconic gadgetry and the star appeal of Hollywood may have appeared to be a perfect match when the electronics giant bought Columbia Pictures in 1989. A quarter century later, it's apparent that Sony ...

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.