Chennai, Oct 31 (IANS) Its curtains down for once iconic Nokia mobile handset maker, as its India plant shuts down operations Saturday at Sriperumbudur, a company spokesman said Friday.
“As announced earlier, we are stopping handset production at our Chennai plant from tomorrow (Nov 1) in the absence of orders from our new parent firm (Microsoft), which terminated the mobile purchase agreement,” a Nokia India official told IANS here.
Global software major Microsoft, which acquired Finland-based Nokia’s global devices and services business including assets in India for $7.2 billion April 25, decided to stop producing handsets from Chennai plant though it could not take over it due to legal battles over a tax notice from the Tamil Nadu government and the Supreme Court in March.
Touted as Nokia’s largest production facility outside Europe, the Chennai plant started rolling out low-end mobile handsets from January 2006 after it was unveiled by then prime minister Manmohan Singh in the presence of his Finnish counterpart Matti Vanhanen.
“The asset freeze by the state tax department has prevented us from transferring the factory to any other mobile handset maker despite having a fully functional electronics manufacturing system,” the official noted.
The state government slapped a Rs.2,400-crore notice to Nokia’s India subsidiary in March, accusing it of selling the handsets from the Chennai plant in the domestic market than exporting them.
In another tax case, the apex court also directed Nokia India in March to furnish a Rs.3,500-crore guarantee before transferring the plant to Microsoft.
Of the 6,600 employees who were on its rolls in March, 5,000 opted for VRS (voluntary retirement scheme) offered by the company, while fate of the remaining 1,600 is not known.
According to the company’s employees union, as Microsoft kept out the Chennai plant from its acquisition deal with Nokia, the facility turned into a contract manufacturing unit and production slumped to four million handsets per month in March from a high of 13 million units in the past.
