Nokia is planning to sell Chennai plant, where it will stop production from November 1, after Microsoft terminated the service agreement. The service agreement was signed earlier at the time of deal-closure between Nokia and Microsoft.
The plant was not transferred to Microsoft, due to asset-freeze imposed by Supreme court over tax-issues. Now, Nokia has proposed that it will deposit the money generated out of plant sales to an escrow account as directed by Supreme court earlier.
“We have said that if we are allowed to sell the factory, any money we get from the sale, we would put it in the escrow account. It won’t be ours. We would put it in a place until the tax dispute is resolved,” Barry French, Executive Vice-President (Marketing, Communications and Corporate Affairs), Nokia, told PTI in an interview here.
“What is particularly crazy is that the value of the facility is going down literally every day,” he said.
“It would be in the interest of everybody that we get what value we can get from the amount,” he added. Nokia has announced suspension of operations at the Chennai plant, once the biggest facility of the company anywhere in the world, from November 1, which has thrown into uncertainty the future of about 1,100 employees now working there. “We will be happy to put the money into an escrow account, and try to find a buyer to get the jobs back. It is heartbreaking,” Mr. French said.
Nokia had offered VRS to Chennai plant employees back in March, with about 5000 out of 6,600 permanent employees already opting for it. Microsoft recently decided to kill Nokia X, Asha and Nokia Feature Phones as part of its major restructuring post Nokia-Microsoft deal closure.