Nokia offers euro 270 mn deposit to unfreeze assets

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SummaryThe Finnish firm has been trying to free up the assets.

Nokia has offered to pay a euro 270 million (Rs 2,263.95 crore) deposit to Indian authorities to unfreeze assets in a tax dispute, according to sources familiar with the matter. The offer comes on top of an earlier agreement to pay around euro 85 million (around Rs 712 crore) although Nokia hopes to eventually retrieve the payments if the tax dispute is resolved in its favour, one of the sources said on Monday.

The Finnish firm has been trying to free up the assets, particularly its Chennai factory which is one of its biggest phone-making plants, ahead of the sale of its mobile phone business to Microsoft.

The combined payment would exceed the income tax bill of Rs 2,080 crore demanded by authorities. While Nokia has said it does not expect the dispute to affect its deal with Microsoft, a lengthy asset freeze could complicate matters by preventing the transfer of ownership in the Chennai plant. Nokia declined to comment beyond saying it was committed to getting its Indian assets unfrozen and “once again calls on the Indian government and tax authority to work with urgency towards a solution”.

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