Boston, MA 12/12/2013 (wallstreetpr) – Things get easy for Nokia Corporation (ADR) (NYSE:NOK) as it gets relief from Indian court on Thursday regarding its Chennai factory in India. As per reports, the Indian court has finally accepted the Finnish company’s plea to release its local factory, which was seized by the Indian tax officials over a tax dispute. This will make make the settlement of assets for the company easier as it is about to complete Microsoft deal.
The Verdict
All eyes were set on Nokia’s tax dispute in India, which is regarded as one of the biggest high-profile tax disputes, as it came in way of Nokia’s deal with Microsoft.In March, the company was slapped with a tax notice of about $20.8 billion for the previous five fiscal years starting from 2006-07.
On Thursday, the Indian court approved the release of the Chennai based factory in lieu of $367.17 million (Rs.2250crore) interim payment, to be deposited in an escrow account within a period of one month. However, the court has applied condition to increase the interim deposit payout in case the asset value at Chennai factory increases.
While the tax dispute case will continue as a separate case, the company will now be able to clear its settlement with Microsoft. According to an advocate, Mohan Parasaran, on behalf of tax department,said that Nokia might have to scoop out ten times of the notice amount if it looses the legal battle against them.
Tax Dispute Not To Affect Microsoft
As per the additional details revealed in the verdict, while the plant could now be transferred to Microsoft but Nokia will remain liable for the outstanding taxes till the dispute is settled in the court. This relieves Microsoft from any further confusions to involve itself in the case and paves way to move ahead with the acquisition of the plant now.
