Nokia Assets Frozen by Indian Authorities as Part of Tax Dispute
Stock Chart for Nokia OYJ (NOK1V)
Nokia Oyj (NOK1V), the telecommunications company selling its mobile-phone division to Microsoft (MSFT) Corp., had some of its assets in India frozen by a local court amid a tax dispute with the country’s government.
India’s Income Tax Appellate Tribunal on Sept. 25 ordered all of Nokia India’s assets be frozen before an appeal on Sept. 26 provided relief, allowing the company access to its cash, said a Nokia spokeswoman who asked not to be identified because she isn’t authorized to discuss legal matters. Even as Nokia’s fixed assets remain frozen, the court’s decision won’t affect business operations or the division sale to Microsoft, she said.
India’s government has ordered Espoo, Finland-based Nokia to pay about 20.8 billion rupees ($333 million) in missing taxes, the spokeswoman said. The dispute stems from business between the parent company and its Indian unit, which makes handsets in the south Indian city of Chennai.
“We are working closely with the tax authorities to ensure that the parties will find a comprehensive solution to the remaining open issues,” Nokia said in a statement yesterday. “Nokia has sufficient assets in India to meet its tax obligations.”
Rekha Shukla, a spokeswoman for India’s Central Board of Direct Taxes, didn’t respond to calls to her mobile phone.
Last month, the company agreed to sell its handset division in a $7.2 billion deal to focus on businesses including wireless networks. India is the world’s fastest-growing smartphone market, with Nokia ranking fifth among vendors, according to CyberMedia Research.
Nokia gained 1.4 percent to 4.92 euros at 3:23 p.m. in Helsinki.
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