Dallas, Texas 12/23/2013 (FINANCIALSTRENDS) – Nokia Corporation (ADR) (NYSE:NOK)has finally found a way about its tax dispute with the India government, where it owns a manufacturing facility in one of the southern states of the country. The government had frozen the assets at Nokia’s Chennai facility.
After failed attempts on the tax dispute, the Government of India had finally offered a settlement plan. This freezing of assets had affected the recent sale of Nokia Corporation (ADR) (NYSE:NOK) to Microsoft Corp.
Following the settlement plan proposal, Nokia had remitted a tax fund of $367.17 million in Escrow, until the tax dispute is resolved. The funding of escrow has led to the Government of India releasing Nokia Corporation (ADR) (NYSE:NOK) assets. The company will now be able to transfer the production facility to Microsoft now. However, the legal dispute is expected to be resolved separately. If Nokia Corporation is found to be guilty of tax payment, it will be penalized over $3.4 billion.
Nokia Corp, in the meanwhile, has lost the backing of certain analysts such as SocGen who have moved NoKia to a Hold, while recommending a buy on Ericsson.
Meanwhile, Nokia’s more interesting news reports is the development of an Android phone which it will be able to sell only after the expiry of its anti-sale deal with Microsoft finishes in 2016. This news is yet to confirmed by all parties concerned.
Additionally, its wealth of Intellectual Property too is in the eye-of the storm in Europe. Nokia holds several types of ‘standards-essential mobile patents.’ The European Commission has since taken the stance to launch anti-trust action if Nokia were to indulge in using these patents to seek advantage. Nokia is expected to make all attempts to monetize its patent pool, especially after its sale to Microsoft Corp.
With the settlement with tax authorities in India, and the transfer of assets to Microsoft, it could well swing the backing Nokia is now getting from the likes of JP Morgan, Berenberg and others on IP monetization.