Nokia can’t transfer unit to Microsoft: SC

NEW DELHI: Nokia on Friday suffered a jolt when the Supreme Court refused to lift the restraint on sale of its Indian assets, including the Chennai plant, as part of the handset maker's global deal with the Microsoft.  The apex court dismissed Nokia's plea against the Delhi high court order directing its parent company in Finland to give an undertaking, including a Rs 3,500 crore ($572.5 million) guarantee, to fulfil the conditions relating to payment of tax dues. The apex court's decision not to interfere with the HC order assumes importance as it would put hurdles on Nokia to transfer its Chennai plant which is a part of the $7.2 billion global deal with Microsoft. A bench, comprising justices A R Dave and Shiva Kirti Singh, declined to accept Nokia's plea for a direction to the income tax department for lifting of the stay on transfer of assets, including the Chennai manufacturing plant, in view of the deal with Microsoft. The apex court had earlier asked the Nokia India to come up with a concrete proposal to settle its tax row with the income tax department. The handset maker had said 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. However, when the company submitted the report of internal valuation of its Chennai plant and not that of an expert, the bench disapproved it. "This is no way. You should have got valuation report by an expert. We wanted to have some authentic valuation," the court observed. Nokia's counsel submitted the projected tax demand is about Rs 21,000 crore. The income tax department's counsel said the company was not fair with the court and had "not come to court with clean hands". Solicitor General Mohan Prasaran said Nokia India had made no profits but it gave Rs 3,500 crore dividend to its parent company — Nokia Corporation Finland — by taking money from its reserves. Nokia said it was willing to deposit Rs 2,250 crore in escrow account or a higher amount that is received for Indian assets but a bank guarantee or undertaking for future demands is not possible. Dismissing Nokia's plea, the bench said it was open for the tax department and Nokia to see if the dispute could be resolved and either of the two could still move the high court if need arises. Source :  http://timesofindia.indiatimes.com/business/india-business/Nokia-cant-transfer-unit-to-Microsoft-SC/articleshow/32044035.cms