Finnish handset maker Nokia, on Tuesday, defended its decision to have separate legal entities for manufacturing and non-manufacturing in India and pointed out that the set-up was one that it had been implemented in other countries.
The company, had, in January 2013, finalised a restructuring in its India operations through which its sales and marketing operations were hived off into a separate entity called Nokia India Sales Pvt. Ltd.
This new entity has roughly 300-500 employees. Nokia India Pvt. Ltd. continues to look after its manufacturing plant near Chennai, and employs close to 8,000 people. The company is currently fighting two different tax disputes, one at the Centre and the other with the Tamil Nadu Government, and the company’s Chennai plant has come under a cloud.
Several union members at the Chennai plant have questioned how the sales entity was allowed to be transferred to Microsoft, which is set to acquire Nokia by end of April, while the manufacturing entity still remains under a cloud.
“The set-up we have in India is actually one we have implemented elsewhere – for instance, we have a similar approach in China, Korea and Vietnam, three countries where we also have separate legal entities for our manufacturing facilities and non-manufacturing operations,” a Nokia spokesperson said.
“This set-up fits the way we run the company with globalized and centralized leadership for each of these functions separately. It has also helped us to streamline processes to achieve greater operational efficiencies,” the spokesperson added.
