Zee Media Bureau

New Delhi: It is, perhaps, the last of work at Nokia's Chennai plant as the company plans to shut it down from Saturday (November 1) as it will be left with no business after Microsoft Corporation terminated mobile purchase agreement from the factory.

In April this year, Microsoft Corporation bought the devices and services (D&S) business of once-leading mobile maker company, including the assets in India for USD 7.2 billion.

However, due to legal issues related to tax by the Indian government, the Chennai facility could not be transferred to Microsoft in the deal. Hence, the US tech giant decided to close it.

"Microsoft has informed Nokia that it will be terminating the manufacturing services defined in the agreement with effect from 1 November 2014. In absence of further orders from Microsoft, Nokia will suspend handset production at the Sriperumbudur facility from 1st November," Nokia had earlier said in a statement.

Nokia started manufacturing in Chennai in January 2006, once the biggest manufacturing facility of the company anywhere in the world, and exported to markets including in the Middle East and Africa, Asia, Australia and New Zealand from there.

In March, the Tamil Nadu government served a Rs 2,400 crore notice on Nokia, saying the firm had also sold products from the Chennai plant in the domestic market instead of shipping them overseas.

In a separate tax case, the Supreme Court had ordered Nokia India on March 14 to give a Rs 3,500 crore guarantee before it transfers the plant to Microsoft.

As a consequence, Nokia entered into a transitional services agreement with Microsoft to address their immediate production needs and keep the factory operational.

"Unfortunately, the continuing asset freeze imposed by the tax department prevents Nokia from exploring potential opportunities for the transfer of the factory to a successor to support the long term viability of the established, fully functional electronics manufacturing ecosystem," the statement said.

The exact number of employees at present in its Chennai factory could not be ascertained but in March out of 6,600 permanent employees, about 5000 had opted for Voluntary Retirement Scheme offered by Nokia.

With PTI Inputs