The Supreme Court of India has ordered Nokia to set aside a $572.5 million guarantee before transferring its assets (which includes the biggest mobile phone making plant) to Microsoft.
This ruling by Supreme Court upholds the earlier ruling by a a lower court. The factory is located in Chennai, India and has been the subject of a tax dispute between Nokia and Indian tax authorities.
Nokia’s sale of its mobile phone business to Microsoft is expected to be completed near the end of this month and Nokia had appealed the decision of Delhi High Court.
Nokia had previously agreed before the Delhi High Court to set aside a guarantee of 22.5 billion Indian rupees while its case with the tax authorities is undecided. However, the court has ordered Nokia to set aside another 35 billion Indian rupees.
The plant at Chennai is one of the biggest plants of Nokia and has an employment of 8,000 people.
Nokia is contesting a tax demand of 20.8 billion Indian rupees and with the interest, penalty and anticipated liability included the total tax bill could be 210 billion rupees.