Three investors keen to take over Nokia's plant: Tamil Nadu Govt

Says I-T dept not allowing sell-off as it wants a guarantee of Rs 3,500 cr

Three “serious investors”, including the Essar Group, have shown interest in buying the Nokia factory near Chennai, which was frozen by Income Tax (I-T) department on the alleged Rs 21,000-crore income tax dispute, according to a senior state government official.

However, the fate of the plant at Sriperumbudur near Chennai continues to remain in the hands of the I-T department.

“The ball is in the court of the I-T department and if they can convince the Delhi High Court and allow de-freezing of Nokia’s plant, the company can sell its assets and make part payment towards income tax arrears. There are two-to-three buyers ready to take over the Nokia plant,” said C V Sankar, additional chief secretary, industries department, government of Tamil Nadu.

Sankar was in Bengalaru for a roadshow on the upcoming Global Investors Meet (GIM), organised by Tamil Nadu government on May 23 and 24.

“The authorities (I-T department) is sticking to their stand demanding a guarantee of Rs 3,500 crore over an ongoing dispute. The company is trying to get its assets de-frozen by the court so that it can sell its assets and make part payment towards the tax arrears,” said Sankar, who confirmed that Essar Group was in the race to take over the plant, located around 45 km from Chennai. The plant, which was once the largest and the most cost-effective for Nokia, also received interest from two more investors, said Sankar.

“Apart from Essar, a couple of other companies have shown interest to take over the plant. Nokia has told us that they have a very serious investor to take over the plant. They have not disclosed the name of the investor and they will divulge the details only if the Delhi High Court de-freezes their assets. So, it all depends on how quick the I-T department agrees,” said Sankar.

It may be noted that apart from the I-T department's claim, the Tamil Nadu government had also slapped a tax notice on the company asking it to pay Rs 912 crore and Rs 600 crore as penalty. Because of the dispute, Nokia could not transfer the plant to Microsoft, which had bought Nokia's device business, and Nokia suspended operations in the plant in November 2014, which resulted in the loss of employment for around 30,000 people.

“If the I-T department agrees and the court de-freezes Nokia’s assets, the company is ready to sell its plant and deposit the amount in a separate account and the money can be adjusted once the tax matter is decided by the court. Now, the Prime Minister has assured of reviving the plant. We hope some solution will come out very soon,” said Sankar.

Nokia plant was set up in 2005 with about Rs 500 crore investment. At the peak of its operations, the plant produced 16 million handsets a month. The plant and machinery are in good condition and any new investors can start manufacturing from the first day of acquisition, Sankar added.