Rs 250-cr investment stuck as owners remain silent

The Sriperumbudur factory near Chennai is Nokia's largest handset-making unit in the world. The company has left the plant's fate in new owner Microsoft's hands, say sources

The Rs 250-crore additional investment earlier committed by Finnish mobile handset maker Nokia in its Sriperumbudur plant near Chennai remains unclear as both the old and new owners of the plant, the largest for Nokia globally, remain tightlipped.

Nokia signed a memorandum of understanding (MoUs) with the Tamil Nadu government for the investment in November 2012. The year saw the state signing one 12 MoUs involving investment worth Rs 20,925 crore. On condition of anonymity, sources said the company had not begun the investment due to the market condition and whether it would be taken up in the future was to be decided by Microsoft, which signed a deal with Nokia to acquire the latter's mobile device business that includes the Sriperumbudur factory.

In an email response to Business Standard, Microsoft said “We will not be able to participate in this story.” Nokia India said, “Nokia's long-standing policy is not to disclose details on its planned investments and we have nothing new to add at this time.”

Nokia India, a subsidiary of Nokia Corporation, Finland was incorporated in 1995 to manufacture and sale of mobile devices.  Nokia Finland had made an initial investment of Rs 35.6 crore in Nokia India starting in 1996, which was subsequently increased to Rs 1,858.95 crore for production, resources and parked assets.

According to figures from the Delhi High Court's recent order, the factory employing around 8,000 people during 2005-12 had a cumulative sales of Rs 1,50,700.44 crore. The Chennai factory became the centre of debate after the Finland Minister and Nokia said recently it would not be transferred to Microsoft if the Income Tax Department did not unfreeze it before December 12. The department had freezed the assets of the company earlier, as part of an ongoing dispute on Rs 6,000-crore dues. This had threatened the livelihood of around 35,000 people engaged directly and indirectly with the Nokia plant.

On December 12, the Delhi High Court allowed Nokia to transfer the assets, including the Sriperumbudur facility, subject to a few conditions.

The transfer of the assets, including the employees, to Microsoft are now expected to conclude in the first quarter of 2014.