Nokia gets favourable ruling on frozen assets in India tax dispute

Indian authorities have frozen some of Nokia's assets in a tax dispute, the Finnish phone maker said on Monday, although it does not expect the move to delay the sale of its handset business to Microsoft Corp.

Nokia has been in dispute with the authorities over an income tax bill of 20.8 billion rupees, one of several tax disagreements involving foreign companies in India.

Tax authorities froze Nokia's assets and bank accounts last Wednesday, a company executive said.

Nokia appealed to the Delhi High Court which last Thursday ordered the bank accounts in India to be unfrozen, allowing the company to transfer or withdraw funds parked there.

But some fixed assets such as buildings remain frozen since last week, the Nokia executive said, meaning the company cannot transfer ownership of the assets without the approval of the authorities.

"We are now talking to the authorities to clear up any lingering concerns," said the executive, declining to give details of the assets.

Nokia said the freezing of the fixed assets would not have any impact on the day-to-day operations of the company and that it had sufficient assets in India to meet its tax obligations.

Nokia's 5.44 billion euros deal to sell its handset business and license patents to Microsoft is expected to close in the first quarter of 2014, subject to approval by shareholders and regulators.

"This does not change our earlier expectation that the transaction with Microsoft will close in Q1 2014," a Nokia spokesman said when asked about the asset freeze.

Nokia was the market leader in India until the first quarter of this year. The company has one of its biggest phone factories at Chennai in the south of the country.

© Thomson Reuters 2013