Nokia employees to move Delhi HC in tax case

Nokia employees to move Delhi HC in tax case Chennai: Facing uncertainty over their future in the wake of Nokia's Rs 6,500-crore tax dispute, employees at the Finnish handset major's facility in Sriperumbudur near here have decided to move the Delhi High Court which is hearing the case.

Recently, Finland's Foreign Minister Erkki Tuomioja had said that in the worst case the Chennai plant could face closure. He had also said that unless this tax dispute is solved and the assets of its Chennai plant unfreezed before December 12, the plant would be left outside of Nokia- Microsoft agreement.

As uncertainty stares the plant's 8,000 employees, Nokia India Employees Union representatives have left for New Delhi today to approach Delhi High Court for resolving their issue.

"They have already left for New Delhi. We are concerned that after December 12, for one year there will be contract manufacturing in Sriperumbudur. We do not want contract manufacturing employees. We do not know what will happen after one year. We only want this plant to be merged with Microsoft," a Union official said.

The Income Tax Department had slapped a notice on Nokia's Indian subsidiary for violating withholding tax norms since 2006 while making royalty payments to the parent company in Finland.

Nokia moved the Delhi High Court seeking lifting of stay on transfer of its assets here to software giant Microsoft and offered to pay a minimum deposit of Rs 2,250 crore as tax, contending that the injunction will jeopardise the sale of its Indian arm to Microsoft under the global deal.However, Nokia's offer was rejected by the Revenue Department.

It may also be noted that the tax dispute has played spoil sport for the Chennai plant in Microsoft's USD 7.2 billion deal to acquire Nokia's equipment business.

Software giant Microsoft is set to acquire Nokia's handset business for 5.44 billion euros (USD 7.17 billion) in cash, in an effort to strengthen its position in the smartphone market.

The Nokia-Microsoft deal is expected to close in the first quarter of 2014, subject to regulatory approvals and other customary closing conditions.

Nokia had earlier said if the sale of the Chennai plant does not happen, the company would wind up its operations over a period of 12 months.

The Chennai-plant employs about 8,000 people with 20 percent of them representing women and has sub-contractors up to 30,000 people.