Dinesh jain
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Finnish mobile manufacturer Nokia wants early
permission to sell off its plant in Chennai and
put the money from the deal in escrow
account till the time its tax dispute with Indian
government is resolved.
"We have said that if we are allowed to sell
the factory, any money we get from the sale,
we would put it in the escrow account. It
won't be ours. We would put it in a place until
the tax dispute is resolved," Barry French,
Executive Vice President, Marketing,
Communications and Corporate Affairs, Nokia,
told PTI in an interview here.
In first comments by a top executive after
Nokia's last week's decision to suspend
operations at its mobile manufacturing unit
near Chennai, French expressed concern over
the status of the plant and its declining value.
"What is particularly crazy is that the value of
the facility is going down literally every day,"
he said."It would be in the interest of
everybody that we get what value we can get
from the amount," he added.
Nokia has announced suspension of operations
at Chennai plant , once the biggest facility of
the company anywhere in the world, from
November 1 which has thrown into uncertainty
the future of about 1,100 employees currently
working there.
"We will be happy to put the money into
escrow and try to find a buyer to get the jobs
back. It is heartbreaking," French said.
The Helsinki-based company was forced to
keep the factory out of a USD 7.5 billion deal
for sale of its handset business to Microsoft
Corp, due to tax dispute with Indian
authorities.
Tax authorities allege that Nokia avoided
paying taxes by wrongfully claiming an
exemption on software exports. Nokia has
challenged the claims of tax department in
courts.
In March, the Tamil Nadu government served a
Rs 2,400 crore notice on Nokia, saying the firm
had also sold products from the Chennai plant
in the domestic market instead of shipping
them overseas.
In a separate tax case, the Supreme Court had
ordered Nokia India on March 14 to give a Rs
3,500 crore guarantee before it transfers the
plant to Microsoft.
"At a time when 60 per cent of the mobiles in
the Indian market is imported, it was a pity
that the absolutely world class and cost-
effective Nokia unit in Tamil Nadu will be shut
down," French said.
The Chennai plant has been frozen by tax
department and the company could not
transfer the facility to Microsoft.
"It is an important issue for us because it is
still a property owned by Nokia and we wish it
wasn't owned by Nokia. We would have liked
to transfer it (the factory) to Microsoft as part
of their purchase of our devices business.
"We believe that would have been the best
outcome for everybody and it would have kept
everybody happy and work going on there. We
were not able to transfer that asset to
Microsoft because it was frozen as part of the
tax dispute," he said.
French said they tried to make the case with
pretty much with anybody who would listen to
them that they would like to sell that facility
before it was too late.
Nokia wants early permission to sell off its Chennai plant
permission to sell off its plant in Chennai and
put the money from the deal in escrow
account till the time its tax dispute with Indian
government is resolved.
"We have said that if we are allowed to sell
the factory, any money we get from the sale,
we would put it in the escrow account. It
won't be ours. We would put it in a place until
the tax dispute is resolved," Barry French,
Executive Vice President, Marketing,
Communications and Corporate Affairs, Nokia,
told PTI in an interview here.
In first comments by a top executive after
Nokia's last week's decision to suspend
operations at its mobile manufacturing unit
near Chennai, French expressed concern over
the status of the plant and its declining value.
"What is particularly crazy is that the value of
the facility is going down literally every day,"
he said."It would be in the interest of
everybody that we get what value we can get
from the amount," he added.
Nokia has announced suspension of operations
at Chennai plant , once the biggest facility of
the company anywhere in the world, from
November 1 which has thrown into uncertainty
the future of about 1,100 employees currently
working there.
"We will be happy to put the money into
escrow and try to find a buyer to get the jobs
back. It is heartbreaking," French said.
The Helsinki-based company was forced to
keep the factory out of a USD 7.5 billion deal
for sale of its handset business to Microsoft
Corp, due to tax dispute with Indian
authorities.
Tax authorities allege that Nokia avoided
paying taxes by wrongfully claiming an
exemption on software exports. Nokia has
challenged the claims of tax department in
courts.
In March, the Tamil Nadu government served a
Rs 2,400 crore notice on Nokia, saying the firm
had also sold products from the Chennai plant
in the domestic market instead of shipping
them overseas.
In a separate tax case, the Supreme Court had
ordered Nokia India on March 14 to give a Rs
3,500 crore guarantee before it transfers the
plant to Microsoft.
"At a time when 60 per cent of the mobiles in
the Indian market is imported, it was a pity
that the absolutely world class and cost-
effective Nokia unit in Tamil Nadu will be shut
down," French said.
The Chennai plant has been frozen by tax
department and the company could not
transfer the facility to Microsoft.
"It is an important issue for us because it is
still a property owned by Nokia and we wish it
wasn't owned by Nokia. We would have liked
to transfer it (the factory) to Microsoft as part
of their purchase of our devices business.
"We believe that would have been the best
outcome for everybody and it would have kept
everybody happy and work going on there. We
were not able to transfer that asset to
Microsoft because it was frozen as part of the
tax dispute," he said.
French said they tried to make the case with
pretty much with anybody who would listen to
them that they would like to sell that facility
before it was too late.
Nokia wants early permission to sell off its Chennai plant