Nokia's Chennai plant has machines to begin operations: Official

One of the ways of reviving Nokia's beleagured factory in Tamil Nadu could be the Centre allowing defreezing of the factory by arriving at some conclusion on the income tax dispute, says a senior Tamil Nadu government official.

The facility already has the machines to start operations and manpower is also available, said the official who added that the Chief Minister has mentioned Tamil Nadu's stand in her recent memorandum to the Centre. If the manufacturing facility is allowed to operate, it could provide employment to many, he added.

On Thursday, Tamil Nadu Governor K Rosiah had said that the state government has set up a special team that recently visited Taiwan to hold talks with potential companies including Foxconn that can take over Nokia's facility, near Chennai. The facility has got into an Income Tax dispute.

“Issues pending with the Government of India have also been taken up at the highest level to facilitate the revival," said the Governor.

Sources in the Government said that atleast five companies have shown interest in reviving the Nokia plant. An official, on condition of anonymity, said that while Foxconn has started manufacturing facilities in other states, it expects Chennai to be a better place to have its facility.

The Nokia factory at Sriperumbudur in Tamil Nadu is one of the largest manufacturing facilities for mobile phones in the world.

Retrospective amendments to tax laws brought in 2012 by the then UPA government forced the Nokia plant to shut down in November 2014, causing more than 15,000 direct employees to lose their jobs.

"To enable such a takeover, the government of India will have to facilitate the defreezing of Nokia's assets, frozen by an order of the Delhi High Court in an Income Tax case, by arranging for the proceeds of the sale/lease transaction to be paid into a separate escrow account to meet the final tax liabilities. Such a course of action will ensure that the existing plant is utilised, jobs restored to thousands of persons and production commenced immediately," Tamil Nadu Chief Minister J Jayalalithaa told the Prime Minister.

Nokia, once an iconic mobile handset maker, in 2014 decided to shut down its plant at Sriperumbudur, near Chennai. The company said it had decided to stop production at its Chennai plant from November 1, 2014, in the absence of orders from its new parent firm (Microsoft), which terminated the mobile purchase agreement. In December 22, 2014, Foxconn also stopped operations in the SEZ.