that Nokia´s tax liability to India is now 21,000 crores i.e.. around 4.8 billion dollars. On top of that, the tax authorities in India are looking to tax Nokia on the capital gains from Microsoft deal.
To add insult to injury, workers of Nokia India are planning a legal action agains the company.
all I can say is...thank god nokia india is (1) a separate corporate entity for which the mother corporation does NOT owe any liabilities, taxes or otherwise, and (2) good thing India unfroze nokia india's bank accts long enough for the indian sub to repatriate as dividends pretty much all of its existing cash, about 650M USD to the parent this past quarter. The Chennai plant itself cost Nokia 150M USD from past reports.
Nokia will BK the sub, and the Indians can try to sell that plant for scrap metal. I think this was why nokia set up the Vietnam plant. India is turning into the next Venezuela.
On Nokia's website Nokia states that the disputed amount is roughly 300,000 million dollars and Nokia is contesting that amount. I watched the last shake out of Nokia when the stock dropped from 4.25 to 3.78 and the catalyst for it was the India tax deal. Look where we're at now. They were claiming billions then too and it turned out to be completely false. imo. Once they accumulate the shares they want we won't hear any more about this.
Sure, when penalties and interest is added to the original bill. If that threat makes the stock dive, I'll take advantage of the temporary drop to make some easy dinero. I'm sure some other "news" of impending disaster will come out just before the next earnings report is due out. I'll be ready. Vacation will be over by then, anyway!
....and if you believe a "government lawyer" is doing more than producing an idle threat.
Nokia Oyj (NOK1V) could face an increased tax bill of 210 billion rupees ($3.4 billion) over a dispute with India’s authorities, according to a government lawyer. India’s Income Tax Department may add penalties and interest to its current 20.8 billion-rupee demand should a New Delhi Court order Nokia’s local unit to pay taxes on royalties to its parent company, said Mohan Parasaran, the government lawyer for the case. Nokia said the claims are without merit.
wow. total thuggery. sounds like they are determined to just drive away foreign direct investment.
but i'll tell you the U.S. is not much better these days... States hurting for revenues are going after businesses and individuals and creatively coming up with new liabilities to seize assets.
For nokia share price I think we just need final resolution... and then the uncertainty of it will be gone. if its a 300million hit, ok fine. shut the plant and move on.
I got up at 3 am and read ever article I could find on the subject. Wow, those ingins must have gone to the Jesse Jackson school of shake downs and finished at the top of class. I'd like to know more about how the entity was structured. Maybe they'll just walk the country.
What is most interesting is that the Indian government is so stupid they don't c are how Microsoft is viewing this whole debacle. If they think Microsoft is ever going to invest time or money there while witnessing this stupidity, they can forget it now. Yet they are too stupid to care that one of the richest corporations in the world will now have zero inclination to follow Nokia';s footsteps in bringing jobs to the country. It is stupefying that human beings in this age can be this utterly imbecilic. WOW....
Sentiment: Strong Buy
Yeah, I think that's why nokia went ahead with the Vietnam plant, so Vietnam will be the beneficiary from this when Microsoft ramps up there in future.
Nokia had already cut down production by 75% as of summer 2013 and transferred the production to its Vietnam plant.
this is localized & capped by the remaining asset in country, sp. the Chennai plant that nokia spent 150m on from past reports. the indian subsidiary will be bankrupted if this keeps up, nokia has already repatriated all free cash when the courts unfroze its bank accounts.
keep in mind that Nokia India is a distinct and separate corporate entity from the parent for which the parent is shielded from any liabilities. the indian tax extortionists can only get what they've got their hands on..namely the Chennai plant...but they it's an inherently self-defeating action as 30,000 jobs will be vaporized for a plant they can only sell for the scrapmetal.
I bet the current settlement offer is pretty much what nokia think all its subsidiary's remaining capital assets in the country is worth. nokia has conducted international business for a long time, Indians are fooling themselves if they think nokia is easy prey.
What we have is a defacto nationalization scheme, only the Indians are too stupid to realize that there's no way for them to collect once Nokia India is put into bankruptcy now that all of its liquid cash has been repatriated to Finland.