July 2, 2011 12:54:04 am
Vodafone,the UK-listed telecommunications company,has warned that it faces a doubling of the $2.5 billion tax bill it is contesting in Indias Supreme Court.
Andy Halford,chief financial officer,said on Wednesday night that the Indian authorities had threatened to impose penalties for non-payment that could raise its outstanding tax liability to $5 billion.
The Indian authorities are pursuing Vodafone for tax that they maintain is due on its 2007 acquisition of Hutchison Essar,a fast-growing Indian mobile operator,for $10.9 billion. Halford said that Vodafone was in an invidious position. He added: [The bill is either $2.5 billion or it could be double that if we take extreme [scenarios. Weve done a lot of M&A and this has never happened. We are not making any moves until this is resolved. Vodafone has set aside $2.5 billion in an escrow account in the event that the Supreme Court rules against it before the end of the year.
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