Nokia is fighting a legal battle against Income tax department in India regarding the tax issue. Nokia requested the court that it would pay a deposit 22.5 billion rupees ($368 million) into an escrow account, so that they can continue the Microsoft deal including the factory sale. While the issue is still in court, Nokia decided to shut down the factory and offered VRS to its employees. Now, Nokia has confirmed to Bloomberg that they are excluding the factory from this deal which will be completed tomorrow.
“We are leaving out the plant because of the tax issues,” Poonam Kaul, a Nokia India spokeswoman, said by telephone today. The plant, one of the Espoo, Finland-based company’s largest phone factories, will make products for Microsoft as part of a servicing agreement, according to Kaul.