Wed, Dec 11, 2013 - Page 15 News List

Nokia said to offer India US$487m to transfer plant

Bloomberg

Nokia Oyj is ready to pay at least 355 million euros (US$487 million) to India’s tax authorities to enable the transfer of a factory in the country to Microsoft Corp, according to two people familiar with the matter.

Nokia is willing to pay at least 270 million euros on top of an already announced amount of 85 million euros if India’s government allows the shifting of assets including the manufacturing plant in Chennai, said the people, who asked not to be identified because the offer is not public.

The assets were frozen by India in September because of a tax dispute. Earlier that month, Nokia agreed to sell its mobile-phone business to Microsoft in a 5.44 billion euro transaction to focus on network equipment.

Nokia might need to find a new buyer for the assets, which are part of the handset unit, unless it can start the transfer this week, the people said.

In an e-mailed statement, Nokia said it is committed to getting its assets unfrozen and called on India’s government and tax agency to work with urgency toward a solution.

The company’s factory in India may not transfer to Microsoft when the deal is completed next year if the freeze continues beyond tomorrow, Nokia said in a separate statement.

The Delhi High Court will rule on the status of Nokia’s assets at a hearing scheduled for today.

India’s government has ordered Nokia to pay about 20.8 billion rupees (US$342 million) in missing taxes in the dispute stemming from businesses between the company and its Indian unit, Espoo, Finland-based Nokia has said.

India is also in a tax dispute with Vodafone Group PLC, saying the UK carrier owes US$2.2 billion due to changes in tax laws applied retroactively.

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