Nokia hopes for early permission to sell facility in India

The value of the facility is declining every day, an official from Nokia has been quoted as saying

Nokia would like to sell off its manufacturing plant near Chennai at the earliest as its value is declining steadily. The Finland-based company, which recently sold its mobile devices business to Microsoft, has said that it would like to sell off the plant and put the money in escrow account till the litigation over the facility is over. The plant has been stuck in a Rs 21,000-crore tax dispute between the company and the Income Tax Department.

According to an agency report from Finland, which quoted Barry French, executive vice-president, marketing, communications and corporate affairs, Nokia, the company said if it is allowed to sell the factory, the money it gets from the sales would be invested in an escrow account, till the tax dispute is resolved.

The company officials were not immediately available for response.

The company last week announced that it will be suspending manufacturing operations in India from November 1, as Microsoft has informed the handset maker that it will be terminating the manufacturing services defined in the agreement with effect from the beginning of November.

French, in his interview with PTI has said that the value of the facility is going down every day and it would be in the interest of everybody that it get the value it can get from the sales.

Last week, the company has announced: "In absence of further orders from Microsoft, Nokia will suspend handset production at the Sriperumbudur facility from November 1. Unfortunately, the continuing asset freeze imposed by the tax department prevents Nokia from exploring potential opportunities for the transfer of the factory to a successor to support the long-term viability of the established, fully functional electronics manufacturing ecosystem".

The facility once employed around 8,000 people and currently employee about 1,200-1,500 people. It may be noted that the Income Tax Department in India has slapped a Rs 21,000-crore notice against Nokia for alleged violation of tax norms, which has been in dispute with various courts almost last two years. The Government of Tamil Nadu has also slapped Rs 2,400 crore sales tax notice.