Microsoft’s global acquisition of Nokia has hit a roadblock in India.
The Delhi High Court has temporarily blocked Nokia’s ability to transfer ownership rights for any immovable assets, while the IT department is attempting to prevent Nokia from divesting itself of any properties within the country.
The IT department’s main objection is that Nokia’s assets are not enough to cover its tax liability, which will be roughly R3,997 crore. However, this doesn’t include a further R654 crore which was demanded after Nokia provided its parent company with R3,500 crore of dividends. The estimated liability of R3,997 crore could rise significantly once interest and various penalties have been accounted for.
The interim order from the Delhi High Court states that Nokia must not ‘surrender the leasehold rights or transfer the ownership rights in respect of any of its immovable assets’. In addition, assets cannot be transferred to a third party, and the assessing officer must be informed before any money can be repatriated overseas.
Nokia’s lawyers have told the IT department that it currently has neither appraised the value of its India business, nor approved a transfer.