Nokia astonished by intention of NRW to attempt to recall subsidies from 1999

Espoo, Finland - Nokia has received information from the North Rhine-Westphalia (NRW) Bank that it and the NRW government plan to attempt to recall subsidies given to the company back in 1999.

Nokia is astonished by this. Based on the facts available to the company and Deutsche Bank, its adviser throughout the entire period, both parties strongly feel that such an attempt is without merit.

Nokia underlines the fact that it submitted documents to NRW Bank during the period in question. These submissions were delivered by Deutsche Bank on behalf of Nokia, and they fully and openly disclosed all relevant facts, including information on types and number of jobs created as well as on how the subsidies were used. No concerns were raised about the submitted documents and their content, either by NRW Bank or the NRW government. Nokia therefore has all the reasons to assume that all parties had a similar understanding about the terms and conditions of the agreement, and that Nokia had fulfilled all the terms.

During the past days Nokia has delivered additional information about the subsidies to NRW Bank as requested. It also informed the bank that it is willing to deliver additional data if needed, and is prepared to discuss the case. Nokia requested to see the NRW Bank records related to the matter, but was rebuffed. Therefore, it is unclear how the bank and government arrived at their position.

Nokia not only fulfilled the conditions of the agreement, it exceeded them. Since 1999 Nokia has invested more than 350 million euros in the Bochum site, well above the amount stipulated in the agreement. Since 1999, Nokia received subsidies via NRW Bank totaling 41.3 million euros. Thus, Nokia’s investments in the factory clearly exceeded the sum it received from the state.

In the course of these investments, a substantial number of jobs were created in Bochum. Nokia decided in 1994 to expand the factory, which employed some 500 people at the time, and since 2001 an annual average of some 3,200 Nokia and third-party employees have been employed at the facility. According to the conditions of the state aid granted to Nokia for the expansion of the Bochum plant in 1998/1999, Nokia was obliged to provide 2,860 jobs. Thus, Nokia has over-fulfilled those job creation requirements.

Additionally, Nokia states that the annual increase in personnel-related taxes and social payments paid by Nokia exceeded the total amount of subsidies received during the 1990s. The increase in average annually paid local taxes to the city of Bochum as well as state and federal taxes was also close to the total amount of subsidies received during the whole period.

Nokia strongly believes it has acted correctly. It reiterates its willingness to discuss and provide additional data to the NRW Bank and government. The facts currently available do not support the planned attempt of the NRW Bank and local government to try to recall the subsidies.