Government Encourages Revival of Nokia Corp (ADR) (NYSE:NOK) And Foxconn Plants In Tamil Naidu

The Tamil Naidu state government is taking measures that will facilitate the revival of Nokia Corp (ADR) (NYSE:NOK) and Foxconn’s factories in the state.

Industries Minister M.C. Sampath revealed the plans during a State Legislative session on Tuesday. The minister brought up the subject as a response to DMK legislator C.V.M.P. Ezhilarasan who had previously raised concerns over the closure of the two plants. Sampath stated that two representatives from the Tamil Naidu government were in talks with Foxconn officials concerning the revival of the closed facilities.

The factories in question are the Nokia plant in Sriperumbudur and the Foxconn facility which is within Nokia’s factory. The plants were part of the frozen assets that were left out when Microsoft Corporation (NASDAQ:MSFT) sold Nokia’s mobile division. The plant was one of the largest mobile phone manufacturing facilities in the world. The plant manufactured more than 15 million handsets on a monthly basis and it had more than 6,000 employees. Foxconn’s factory had 1306 permanent workers according to Labour and employment Minister Nilofer Kabil. The minister also revealed that the affected employees were supposed to receive compensation and so far only 334 employees have received compensation.

Tamil Naidu’s governor K Rosaiah also spoke during the state assembly revealing that serious efforts were in effect to restore the Nokia plant together with its component providers. Chief Minister J Jayalalithaa also sent a memorandum to the Prime Minister requesting his influence towards the revival of the facilities. Jayalalithaa stated that Microsoft and Foxconn recently revealed their plans to take over and restore the plants. The Chief Minster pointed out that the government would have to oversee the defreezing of the assets for such a takeover to happen.

The State Legislative assembly believes that the revenue collected from the seal or lease agreement over the property should be used to ease tax liabilities through a separate escrow account. The application of such a strategy will facilitate the restoration of the plant as well as the jobs to the people that were affected by the closure.

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Published by Flavia Carruth

Hi, I am Flavia and have done my MBA with finance as specialization and a Bachelor in Economics with 4 years of experience as Financial Analyst in leading Software Firm. I have passion for article writing, report making and stock market Analysis.

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