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Nokia to transfer assets to Microsoft by April 2014

Says ongoing tax proceedings in India to have no bearing on the closure of the deal

T E Narasimhan  |  Chennai 

Finland-based handset maker Nokia today said that it expects its deal with Microsoft to close in April 2014.

According to the 5.4 billion euro sale announced in September 2013, Nokia will transfer most of its phone business to Microsoft.

The fate of Nokia's India operations, however, remain uncertain. Nokia said the ongoing tax proceedings in India will have no bearing on the close of the transaction or the terms either.

"Nokia reiterates that ongoing tax proceedings in India have no bearing on the timing of the closing or the material deal terms of the anticipated transaction between Nokia and Microsoft," it said in a statement.

Nokia and Microsoft have already received most of the required regulatory approvals, including approvals from the European Commission and the US Department of Justice. The transaction though is pending approvals from certain antitrust authorities in Asia which are still conducting their reviews, said the company.

The apex court on March 14 ordered Nokia to give a Rs 3,500 crore guarantee before it transfers one of its biggest plants globally, located at Sriperumbudur, around 40 kms from Chennai, to Microsoft. The order upheld a lower court verdict over the plant, which is the subject of a income tax dispute, and has been challenged by the Finnish company.

Last week, the Tamil Nadu sales tax department slammed a Rs 2,400 crore notice on Nokia, alleging that the company has been selling all its produce in the domestic market, while enjoying the benefits given to exports. The company denied the allegation and has taken the matter to the Madras High Court.

These developments have created "uncertainty" among the around 8,000 people employed in the Sriperumbudur facility, 50% of which are women, and another 25,000 people, who are employed indirectly.


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First Published: Mon, March 24 2014. 11:48 IST