Nokia offers $369 mln deposit to unfreeze Indian assets

HELSINKI Mon Dec 9, 2013 8:13pm IST

Low-cost handsets from Nokia on display at a Nokia store in Ahmedabad March 4, 2013. REUTERS/Amit Dave/Files

Low-cost handsets from Nokia on display at a Nokia store in Ahmedabad March 4, 2013.

Credit: Reuters/Amit Dave/Files

Related Topics

Stocks

   

HELSINKI (Reuters) - Nokia (NOK1V.HE) has offered to pay a 270 million euro deposit to Indian authorities to unfreeze assets in a tax dispute, according to sources familiar with the matter.

The Finnish firm has been trying to free up the assets, particularly its Chennai factory which is one of its biggest phone-making plants, ahead of the sale of its mobile phone business to Microsoft (MSFT.O).

The offer comes on top of an earlier agreement to pay around 85 million euros, although Nokia hopes to eventually retrieve the payments if the tax dispute is resolved in its favour, one of the sources said on Monday.

The combined payment would exceed the income tax bill of 20.8 billion rupees demanded by local authorities in one of several tax disagreements involving foreign companies in India.

While Nokia has said it does not expect the dispute to affect its 5.4 billion euros deal with Microsoft, which is expected to close in the first quarter of 2014, a lengthy asset freeze could complicate matters by preventing the transfer of ownership in the Chennai plant.

An asset freeze would allow the facility to operate as usual but prevent a change of ownership. If it is still in place when the Microsoft deal is finalised, Nokia could briefly operate the plant as a contract manufacturer for Microsoft, but both companies are hoping to avoid this.

Nokia declined to comment beyond saying it was committed to getting its Indian assets unfrozen and "once again calls on the Indian government and tax authority to work with urgency towards a solution".

The Delhi High Court is due to hear the case on Tuesday.

(Reporting by Ritsuko Ando; Editing by Tom Pfeiffer and Mark Potter)

FILED UNDER:
  • Most Popular
  • Most Shared

Pending Reform

REUTERS SHOWCASE

Power Theft

Power Theft

India to invest $4 billion to tackle power theft  Full Article 

Debt Funds

Debt Funds

India monitors foreign flows into debt funds, may tighten rules  Full Article 

Bulgari Back in India

Bulgari Back in India

CEO: we shouldn’t have left India so we’re back  Full Article 

 Hindu "Modi-fication"

Hindu "Modi-fication"

Fears grow about Hindu "Modi-fication" of education  Full Article 

Weak Credit

Weak Credit

Hard to hit tax revenue target, credit weak - Jaitley  Full Article 

China Rate Cut

China Rate Cut

China surprises with interest rate cut to spur growth  Full Article 

Gold Imports

Gold Imports

RBI cautious on response to gold import surge  Full Article 

Economic Corridor

Economic Corridor

China commits $45.6 billion for economic corridor with Pakistan  Full Article 

Overseas Funds

Overseas Funds

RBI says overseas borrowed funds can be parked with banks in India  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage