New Delhi: Nokia India on May 26 withdrew from Delhi High Court its plea seeking permission to urgently sell its mobile manufacturing unit in Chennai, which was frozen over a Rs-10,000 crore claim raised by the Income Tax department, saying the proposed buyer has backed out. At the same time, Nokia and I-T department told the court that a report has been received from Ernst and Young India Pvt Ltd (EY) on valuation of the company's assets.
As per the report, Rs 361 crore was the valuation of assets if they were to be sold as 'on going concern' (company not bankrupt) and Rs 417 crore if 'non going concern' (company has gone bankrupt), they said. Nokia submitted before a bench of justices Badar Durrez Ahmed and Sanjeev Sachdeva that it was withdrawing the plea seeking permission to urgently sell the unit as the proposed buyer has withdrawn.
It told the court that the buyer had offered it Rs 400 crore for the assets. In response to Nokia's submission, the court noted the proposed buyer had also offered a price that was in the same range as the valuation by EY. The matter was listed on May 26 after the court had on May 19 agreed to give it an urgent hearing after Nokia said a buyer had been found for its Chennai unit. Initially, the matter was listed for hearing on September 7.
EY was appointed by the court as the valuer for Nokia India's Chennai mobile plant and its other assets. The court had said that EY would do the valuation of the assets of the company on both 'on going concern' (company not bankrupt) and 'non going concern' (company has gone bankrupt) methods. On April 24, the Income Tax department had told the court that the amount offered by an "arm's length buyer" for Nokia India's Chennai plant was "very little".
An 'arm's length' transaction is one in which the buyer and seller of a product act independently and have no relationship with each other to ensure that they act according to their self-interest and are not influenced by other party. The I-T department had said that the offer amount was very little and if the unit and related assets were sold, it would be difficult to recover the tax amount which it has tentatively placed at Rs 10,000 crore.
