Nokia cleared to sell Indian factory to Microsoft

Nokia's fixed assets in India had been frozen because of a tax dispute

Nokia has obtained permission to sell its Indian handset factory after it agreed to deposit funds as security until a dispute with the country's tax authorities is resolved.

The Indian government had frozen Nokia's fixed assets in the country because of the dispute over taxes for mobile phone software licenses, potentially interfering with Microsoft's acquisition of the company's phone business.

Microsoft said in September it plans to acquire Nokia's Devices & Services business, which includes the smartphone and mobile phones businesses, for over US$7 billion.

Nokia India officials insisted that the acquisition would go through as scheduled by the first quarter of 2014. If the court had not allowed the unfreezing of the asset, the company had a contingency plan that the factory in Chennai in south India would operate as a contract manufacturer to Microsoft after the merger, according to a source.

The Delhi High Court on Thursday agreed to unfreeze Nokia's assets in India after the company offered to keep a security of about US$365 million. In October, the court ordered the Income Tax Department to release bank accounts held by Nokia, but allowed the freeze on the factory in connection with a $331 million demand from tax authorities.

The factory in Chennai employs nearly 7,000 staff and has continued to make handsets meanwhile.

A number of technology companies have tax disputes in India, which has complex tax rules. Vodafone has a long-standing dispute with Indian authorities for not withholding tax when buying a 67 percent stake in its Indian operation from Hutchison Telecommunications for $11 billion in 2007.

Nokia did not immediately comment on the order.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags MicrosoftsmartphonesregulationNokialegislationlegalconsumer electronics

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

John Ribeiro

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Tom Pope

Dynabook Portégé X30L-G

Ultimately this laptop has achieved everything I would hope for in a laptop for work, while fitting that into a form factor and weight that is remarkable.

Tom Sellers

MSI P65

This smart laptop was enjoyable to use and great to work on – creating content was super simple.

Lolita Wang

MSI GT76

It really doesn’t get more “gaming laptop” than this.

Jack Jeffries

MSI GS75

As the Maserati or BMW of laptops, it would fit perfectly in the hands of a professional needing firepower under the hood, sophistication and class on the surface, and gaming prowess (sports mode if you will) in between.

Taylor Carr

MSI PS63

The MSI PS63 is an amazing laptop and I would definitely consider buying one in the future.

Christopher Low

Brother RJ-4230B

This small mobile printer is exactly what I need for invoicing and other jobs such as sending fellow tradesman details or step-by-step instructions that I can easily print off from my phone or the Web.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?