It appears that the taxman has caught up to Nokia (NYSE:NOK).
As the Indian government increases its efforts to limit tax evasion as a means to offset an ever-widening fiscal deficit, Indian tax officials have zeroed in on the company. One of the Finnish handset maker’s largest plants located in Chennai, India, was raided Tuesday, prompted by allegations that the company has avoided paying $543 million in taxes.
While the raid did not disrupt the manufacturing operations that produce more than 20 phone models, the visit by Indian authorities highlighted the numerous regulatory problems facing Western companies operating in the country. Many multinational corporations have complained about India’s business climate, citing its retroactive taxes, poor infrastructure, and unclear investment rules as deterrents…
Raid is a rather strong word. The operations were not shut down. Sounds like they just want their tax records. This happens all the time in third world countries. If you do any international investing you already know this. I don't know how many of my companies this has happened to. It is usually a way of corrupt politicians extracting money out of businesses. Usually, some kind of negotiated bribe money is paid and the problem goes away. Nokia is going to have to pay up whether they are guilty or not. It is just the way it is in India.