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Court allows Nokia India to transfer their manufacturing unit to Microsoft so deal can go forward

Nokia India

The Delhi High Court in India has finally allowed Nokia India to sell its Chennai manufacturing unit to Microsoft. If the court had ruled otherwise, Nokia may have had to exclude Indian assets from the acquisition deal, forcing the closure of the factory.

Set up in 2006, the Chennai factory is one of their largest manufacturing units employing 5800 people and producing 200 million phones a year.

Nokia India has been in tax disputes in India with the Income Tax Department in recent past with a tax demand was around INR 200 million which inflated to over INR 2 billion due to penalties. The demand pertains to royalty payments by Nokia India to the parent company, Nokia Finland.

After the decision today, Nokia is free to sell the factory to Microsoft as part of their $7.2 billion sale of its global mobile phone business. The court has asked Nokia India to deposit INR 225 million ($367.17 million) value assets as security in an escrow account as it awaits the resolution of the case. If the company loses the case, it might be required to pay a fine of $3.4 billion for non-payment of tax and interest.

Nokia has shared the following statement on the Delhi High Court decision via email.

“Nokia acknowledges the decision by the Delhi High Court today to release Nokia’s Indian assets, including its Chennai facility, for the planned transfer to Microsoft.

Our current understanding is that this decision allows for the transfer of the assets. However, Nokia has been asked to meet a number of conditions in the ruling, and still needs to provide the authorities with additional documentation. Nokia expects these conditions to be in line with international treaties and practices.

The company will now start to prepare for the planned transfer of the assets, but notes that there are still a number of statutory clearances that remain before the assets can transfer. Nokia repeats its call for the Indian government to work with urgency to facilitate the other approvals needed for the transfer and secure employment for the tens of thousands of employees involved.

Nokia continues to expect the transaction with Microsoft to close in the first quarter of 2014.”

Source: Live Mint; Image Credit: Nokia

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Comments

There are 31 comments. Sign in to comment

paulheu says:

200 million phones/year from this plant alone..

tissotti says:

It's the "value" factory. It has made/makes S40 phones that naturally sell hundreds of millions a year. China makes high end, before it was Finland and China. Then they have 5 smaller factories that are a bit more flexible, like Brazil and South Korea for example. 

_Emi_ says:

This sounds good! of course we will find the ignorants who think Nokia phones without Nokia will not sell, and they will jump ship. but this sounds good! new Lumias with WP8.1 must be a good thing next year, and cant wait to hear official news about it.

Great phucking new. I'm just awaiting the "Global Launch" of the Lumia (fill in the name)....by Microsoft, pretty much like what they do with the Xbox One.

sri_tech says:

One thing Microsoft should improve after the deal is global release for the phones.
They should at least launch them in 20 countries initially and quickly expanding to more in 1-2 months.
Staggering launches are hurting a lot.
Also, do something about those carrier exclusives.

pulkit10 says:

Glad it went through. For such a large free market, India's policies are quite detrimental and hostile towards large businesses. They actually represent the worst of all worlds...companies struggle and so do the lower class. The only ones benefiting are the select few sitting on top. Nokia's "tax fraud" case is another example. Charges were dreamt up by the Indian tax authorities overnight.

aitt says:

As long as the quality remains Im happy. If the 1520 is my last Nokia may it go out in a blazing glory

spcdog says:

Blaze of glory? I think you're getting your phone confused with the Galaxy S4.

BlackGoku says:

Why are these Lagdroid fanboys hanging around in the Windows ecosystem by the way.Still btw great phone s4 nah?Funny how it caught fire recently!LMFAO

aitt says:

Ive never cared for Samsung. The last I had was the Infuse and their original Tab. I always thought they were over hyped. Always liked HTC over them. Nokia and HTC are the best at what they did cause phones is all they did. Said to see them both become a shell of what was. Had it not been for Nokia I'd probably still be on Android. But I hope you not referring to me as some "fanboy"

spcdog says:

Nah, he meant me. I think he hit an ESL barrier and misinterpreted the comment. Always a joy to see someone not get a joke and then nerdrage about it. :/

John20212 says:

India would be stupid not to allow it, since they need the 6000 jobs more than Nokia needs them. As mentioned in the article if India blocked the transfer Nokia would just liquidate the factory and be done with it and the poor 6000 workers would be out on their ass.

 

blnwp says:

Let me tell you a honest thing, the corrupt politicians and offiicials really don't care about 'just' 6k jobs in this country of massive size.

Rishicash says:

They certainly do when it comes election time! 

 

SACRIFICE_84 says:

Corrupt govt of india..

Comes from a frustated indian.

Rishicash says:

I wonder how many millions of rupees changed hands under the table to get this deal to go through.

Raghav94 says:

Let's Talk some sense, shall we, please?

Not possible, when the ruling is from hon'ble court. So yes, talk some sense!

Rishicash says:

Right. Do tell why this is nonsensicle. The entire Indian government is notoriously corrupt. The US government is corrupt too, even the Supreme Court. I'm not anti-Indian btw...I've lived there and have been visiting for 37 years.

N1NJ4K1LL3R says:

Fuck them, how about Microsoft and Nokia just fire everyone, close the plant and use that 3 billion to build a new plant here in America.

rponting says:

That would be great. Anyway the quality of nokia phones detrimented a lot since it started manufacturing in India. Of course the lumia line is manufactured in China and only asha in India.

blackprince says:

That would be a big image booster.

dj0502 says:

Then Americans will complain that their Lumia phones would be 799 on contract!

rponting says:

Hahaha But I have a story to tell. I have a made in finland nokia 3105 still working which was bought 8 years ago, and One nokia x2 died 1 year after it was bought.

dj0502 says:

I am a fan of Nokia's credibility when it comes to the durability of their phones. However, based on your sample, I think it can also be attributed to the difference in technology. I would think that 3105 is less complicated to manufacture than X2.

Because there is a world outside America you ignorant twit.

PJ Suresh says:

Even if I'm still a nokia fan, its a bad news for me...

Martinio32 says:

In the massive production it's very easy to make a lot of errors. Quality or quantity. The choice.

rponting says:

And in introspection,I think that really might be the case. Anyway phones these days are not manufactured to last.