Deal will go through this month, insist Microsoft, Nokia

Microsoft's $7.4-billion acquisition of Nokia will close this month despite the ongoing tax-related dispute the Finnish telecom major is facing in India. This was firmly indicated by both companies while sharing information about customer data privacy and contracts in Chennai.

This means the future of Nokia's Chennai manufacturing plant will remain uncertain, with the Income Tax department freezing Nokia India's assets last year over a tax dispute (See: Delhi HC unfreezes Nokia's Chennai plant).

The tax issue needs to be resolved in the next 10 days to enable Nokia transfer the asset to Microsoft as part of the global deal.

If the deal goes through and the assets are not transferred, the Sriperumbudur factory will become a sub-contractor for Microsoft for a period of one year.

While the deal was cleared in China recently, Nokia is involved in tax-related issues not only with the Income Tax department but also with Tamil Nadu sales tax. ''Time is running out for us,'' said a member of the Nokia Thozilalargal Sangam, a union representing employees at Nokia factory.

Nokia has offered a voluntary retirement scheme to 6,600 permanent staff at the factory, and recently told trainees that they may not be hired in the plant.

With the completion of the transaction, a Microsoft Finnish affiliate will assume responsibility for personal data and contractual relationships for the products and services related to this business, says a statement issued by Chad Fentress, vice-president, and chief ethics and compliance officer, Nokia and Brendon Lynch, chief privacy officer, Microsoft.

''Microsoft cares deeply about your privacy and the protection of your personal data and will continue to collect and use your personal data in the same ways and for the same reasons as Nokia, and you should experience no difference as a result of the sale,'' said the statement.

Nokia will continue to run its businesses, including HERE location-based products and services, which are not part of the Microsoft acquisition. The responsibility for personal data and contractual relationships relating to these products and services would remain with Nokia. The statement quoting the company said Nokia was committed to maintaining the highest standards on protecting privacy and personal data.

''We wanted to give you notice of these changes. Our commitment to your privacy remains paramount,'' the statement said.