Vodafone, the UK-listed telecommunications company, has warned that it faces a doubling of the $2.5 billion tax bill it is contesting in India’s Supreme Court.
Andy Halford, chief financial officer, said on Wednesday night that the Indian authorities had threatened to impose penalties for non-payment that could raise its outstanding tax liability to $5 billion.
The Indian authorities are pursuing Vodafone for tax that they maintain is due on its 2007 acquisition of Hutchison Essar, a fast-growing Indian mobile operator, for $10.9 billion. Halford said that Vodafone was in an “invidious position”. He added: “[The bill] is either $2.5 billion or it could be double that if we take extreme [scenarios]. We’ve done a lot of M&A and this has never happened. We are not making any moves until this is resolved.” Vodafone has set aside $2.5 billion in an escrow account in the event that the Supreme Court rules against it before the end of the year.
Andy Halford, chief financial officer, said on Wednesday night that the Indian authorities had threatened to impose penalties for non-payment that could raise its outstanding tax liability to $5 billion.
The Indian authorities are pursuing Vodafone for tax that they maintain is due on its 2007 acquisition of Hutchison Essar, a fast-growing Indian mobile operator, for $10.9 billion. Halford said that Vodafone was in an “invidious position”. He added: “[The bill] is either $2.5 billion or it could be double that if we take extreme [scenarios]. We’ve done a lot of M&A and this has never happened. We are not making any moves until this is resolved.” Vodafone has set aside $2.5 billion in an escrow account in the event that the Supreme Court rules against it before the end of the year.
