Nokia’s Chennai Factory to be transferred to Microsoft after a statement in court

The acquisition of Nokia by Microsoft has made headlines recently. And this means that Nokia cannot produce devices under its name for three years. Well that’s what the deal says or as rumour goes. But we see Nokia producing phones under its name even today.

Nokia has many plants in the world and there is one in the heart of Chennai, at Sriperambudur. It is the largest/biggest phone manufacturing factories in the world. As part of the Nokia-Microsoft deal, Microsoft has the right to take all of Nokia’s plants for next three years. But the plant at Chennai was in dispute with the Indian court on account of tax.

The court has given a clearance for Nokia to transfer its asset to Microsoft which leads to smooth dealing. But if the court had ruled otherwise, it would lead to closing of the biggest phone manufacturing plant. The plant manufactures about 200 million phones a year and have 5800 employees. Nokia was asked to deposit 2250 crores initially, but also to reserve 3500 crores in case the tax demand was substantially higher.

“Our current understanding is that this decision allows for the transfer of the assets. However, Nokia has been asked to meet a number of conditions in the ruling, and still needs to provide the authorities with additional documentation. Nokia expects these conditions to be in line with international treaties and practices,” is what Nokia had to say when asked about the case.

The court froze Nokia India’s assets in September following the royalty payment made by the Indian company to its parent between 2006-07 and 2010-11. Similar cases are also filed against Shell India and Vodafone India which damages the image of India to investors.

This might be a really bad time for Nokia. Lets hope for the best- for both the Governement and Nokia. Only time will tell.