Nokia plans to suspend production at its mobile phone factory in India because of an unresolved dispute with the country's tax authorities.
The plant, once Nokia's biggest, will stop operations from 1 November. Nokia's handset business was sold to Microsoft in April so that it could focus on its more profitable units such as network equipment.
However, the firm continued to operate its factory near Chennai city as a contract manufacturer for Microsoft. Nokia's Indian facility has remained at a the centre of a tax dispute that began last year over the value of payments made for the development of software.
As a result, the firm has been unable to sell the factory and is now seeking international arbitration to help resolve the matter.
"The continuing asset freeze imposed by the tax department prevents Nokia from exploring potential opportunities for the transfer of the factory to a successor," Nokia said in a statement.
"In absence of further orders from Microsoft, Nokia will suspend handset production at the Sriperumbudur facility."
When Nokia sold its devices and services business to Microsoft for €5.4bn (£4.2bn) earlier this year, the transaction excluded the Finnish firm's manufacturing facilities in Chennai and Masan, South Korea.
Nokia said at the time its India "manufacturing facility is subject to an asset freeze by the Indian tax authorities as a result of ongoing tax proceedings".
The Chennai plant had employed about 6,600 full-time workers.
bbc.com
The plant, once Nokia's biggest, will stop operations from 1 November. Nokia's handset business was sold to Microsoft in April so that it could focus on its more profitable units such as network equipment.
However, the firm continued to operate its factory near Chennai city as a contract manufacturer for Microsoft. Nokia's Indian facility has remained at a the centre of a tax dispute that began last year over the value of payments made for the development of software.
As a result, the firm has been unable to sell the factory and is now seeking international arbitration to help resolve the matter.
"The continuing asset freeze imposed by the tax department prevents Nokia from exploring potential opportunities for the transfer of the factory to a successor," Nokia said in a statement.
"In absence of further orders from Microsoft, Nokia will suspend handset production at the Sriperumbudur facility."
When Nokia sold its devices and services business to Microsoft for €5.4bn (£4.2bn) earlier this year, the transaction excluded the Finnish firm's manufacturing facilities in Chennai and Masan, South Korea.
Nokia said at the time its India "manufacturing facility is subject to an asset freeze by the Indian tax authorities as a result of ongoing tax proceedings".
The Chennai plant had employed about 6,600 full-time workers.
bbc.com
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