Nokia may not sell India plant to Microsoft over tax dispute

Thursday, 24 April 2014 - 7:28pm IST | Place: undefined | Agency: dna webdesk

A current tax dispute on Nokia's India plant may result in its exclusion from the deal that concludes on Friday for sale of its global business to Microsoft. 

A spokeswoman for Nokia's Indian unit said in a statement on Thursday that Nokia will operate the factory as a contract manufacturing unit for Microsoft after the deal is executed.

"It's highly unlikely that the plant will transfer, given that the (deal) closing with Microsoft is tomorrow," the spokeswoman said. "If the asset doesn't get transferred, we are entering into a service agreement with Microsoft."

According to the conditions set by the Indian court, Nokia must agree on payment of a guarantee for potential tax dues in a dispute with Indian authorities, before it can transfer the plant to Microsoft. Nokia's India plant, which employs about 6,600 employees, is one of its biggest factories globally.

Nokia lawyers have previously told the Delhi High Court that the company would run the plant as a contract manufacturer in case it is not transferred to Microsoft, but only for 12 months after closing their 5.4 billion euros ($7.5 billion) global deal.

Nokia has offered a voluntary retirement scheme to its factory employees earlier this month.

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