Nokia’s Chennai plant would remain attached as SC junks its plea

nokia-factory

Mobile handset manufacturer Nokia’s plans to transfer its Chennai plant to Microsoft suffered a setback with the Supreme Court Friday dismissing its plea against the Delhi High Court order asking its parent company Nokia Finland to undertake to meet any future tax liability for its India operations which are being folded up.

A bench of Justice Anil R.Dave and Justice Shiva Kirti Singh passed the order after it declined to accept Nokia’s plea that the attachment of its assets by the income tax department be lifted and it would deposit Rs. 2,250 crore or net sale consideration it would receive from Microsoft for its assets whichever is higher.

The dismissal of Nokia’s plea would put obstacles in the transfer of its Chennai plant which is part of $7.2 billion global deal between Nokia and Microsoft International involving the former’s devices and services business changing hands.

Besides other conditions including an undertaking by Nokia Finland, the High Court had asked Nokia India to put Rs.2,250 crore in an escrow account. This deposit of amount that Nokia offered to make before the apex court was within 15 days of the receipt of sale amount from Microsoft.

Nokia, in its plea, said that it would approach the tax authorities for their approval for the transfer of its assets to Microsoft along with final valuation of its Indian assets.

At the outset of the hearing, the court expressed its disapproval of Nokia submitting its internal valuation of its Chennai plant and not one by an expert as directed by the court on Thursday.

“Who has valued the property? We had told you to submit a valuation report from an authorised valuer. We wanted some authentic report. This is a Nokia report,” said Justice Dave disapproving the report submitted by Nokia’s counsel Vikas Srivastava.

Reiterating some of the arguments that Nokia has been making ever since it moved the apex court about falling value of its Chennai plant with the passage of time, Srivastava said that the projected tax demand is about Rs.22,0000 crore was more than the total worth of its Indian and global operations.

The court said that there was something “fishy” as Solicitor General Mohan Prasaran told it that Nokia India had made no profits but it gave Rs.3,500 crore dividend to its parent company by taking money from its reserves.

“(There were) No profits. Dividends were paid. Dividends were paid from reserves. It appears fishy,” observed Justice Dave.

Prasaran told the court that the tax demand of Rs.2,649 crores was a determined demand. Besides this, Rs.10,149 crore tax demand was the barest minimum that would be raised and it was coupled with interest and liabilities.



  • VH

    Indian tax thieves abetted by a rubber stamping court. Why did the court not ask the reason behind this dispute..namely that India ‘retroactively’ changed its tax laws and created liability for those years when there was no such liability before. Ask yourself, a company like Nokia with good accountants and lawyers would have saved themselves the trouble by always being in compliance with the tax laws….

    We know India did this, they tried the same crooked trick against vodaphone and other multinational companies by changing the tax laws for decades going back, and then saying “Oh look here, you cheated on your tax so now you pay us all you have” despite the fact that these victims of indian injustice fully followed the laws at the time.

    Nokia and the Finnish people are known as some of the most honest around…Indians have a deserved reputation for greed, theft and lack of morals. The public rape stories you hear about only happens in India…and this too was a public rape of an outstanding company that invested in India’s future and created 35000 jobs for Indian people that was brutally, ruthlessly, and criminally backstabbed, robbed and raped by the Indian government and people.

    India can piss its reputation goodbye, The capital flight has already begun, in another 5 years, Indian GDP will be back at 1970 levels.

    Laughable that these Justices seem to have no conception of what justice means. All they cared about was making sure India was able to steal as much money from Nokia as possible.

    Justice Dave should have been saying….”its fishy that the taxman used ‘retroactive changes in tax laws’ to entrap an innocent company” in fact it is an abomination of justice, no where else in the world do people or government act tihis way…how can you change the laws ex post and then hold the people liable for not following rules that did not yet exist…the idea is stupid and criminal…and very much symptomatic of Indian corruption.

  • VH

    Mark my words, these corrupt government officials have left Nokia with no choice but to leave India and shut down its factory..the only people hurt will be the Indian employees and their dependents who were lucky enough to work for this outstanding company.

    India’s blatant covetousness and disregard for its own laws, for property rights, for due process, for justice and norms of decent human behavior has destroyed the last dregs of its reputation, and along with that goes its future; no sane company will ever again invest in India the way Nokia did.