Albany, New York (09/25/2014) – Nokia Corporation (ADR) (NYSE:NOK) urged the Government of India to resolve its pending tax issues at the earliest. The company has a mobile manufacturing unit in Chennai, which it wants to sell, but is unable to do so because of tax glitches in India. The President and Chief Executive of Nokia, Rajeev Suri asked the Indian Prime Minister, Narendra Modi to do so rapidly, because the company did not require the unit anymore. Nokia’s unit is of no use after its deal with Microsoft Corporation (NASDAQ:MSFT).
The Wasteful Mobile Manufacturing Unit in India
Nokia Corporation (ADR) (NYSE:NOK), which has seen a sudden demolishment of its mobile business, soon after the revolutionary smartphones with Android and iOS came, said that the unit was not useful for the company anymore. Mr. Suri said that the sale of Chennai unit was meant to help India grasp an opportunity for building stronger ecosystem for mobile manufacturing in place.
However, he added, at present, Nokia is unable to go ahead because of tax dispute. Mr. Suri added that Nokia has also proposed to put all proceeds of Chennai unit sale in the escrow account, till the time tax issues are not resolved.
Chennai Unit not a Part of Microsoft Deal
Interestingly, the mobile manufacturing plant in Chennai location of India was not a part of the deal with Microsoft. This was so because the Indian tax authorities had slapped Nokia with a notice for tax norms violation notice. According to the tax authorities in India, Nokia had been violating the tax norms there since 2006.
After the deal with Microsoft Corporation (NASDAQ:MSFT), Nokia Corporation (ADR) (NYSE:NOK) had said that the Chennai unit would continue to operate as a contract manufacturing unit. However, the company’s production shifted partially to Vietnam and other nations since then. It has also spread the clouds of unemployment over 30,000 workers in the plant.
The tax issue was not a part of the new Government in India. Mr. Suri said that though the Modi-led Government was not a reason for “the situation,” but it had powers to resolve the matter quickly.