Finnish handset vendor Nokia claims that allegations of “securities fraud” filed against it in a US class action lawsuit on February 5 are “without merit.”
US class action accuses Nokia of misleading investors
The complaint, filed in a US District Court, accuses Nokia of failing to disclose information about component supply shortages and manufacturing problems between January 24, 2008 and September 5, 2008.
Nokia allegedly also failed to disclose it had cut its average selling price (ASP) during the period to maintain its market share.
Thirdly, the complaint also alleges that a Nokia press release dated November 5, 2008 failed to mention production glitches with a mid-range device and of aggressive price cuts by some of its rivals.
These details were only apparently disclosed to investors later on the same day, resulting in Nokia’s American Depository Shares falling 8%.
The suit is being filed in New York by investors that bought Nokia ADSs before they tumbled in price.
Nokia said it intends to “defend itself against the complaint vigorously.”
“Nokia has become aware of the filing of a class action complaint …alleging securities fraud in connection with statements made by Nokia between January 24, 2008 and September 5, 2008 regarding the production and sales of certain of its mobile devices,” Nokia said.
“Nokia has reviewed the allegations contained in the complaint and believes that they are without merit.”
Meanwhile, almost 300 Nokia staff could be laid off when the firm restructures a factory in Finland.
The handset vendor plans to cut the number of employees at its Salo site by 285 to 1,915, as it streamlines the plant to focus on the production of high-end smartphones.
Nokia said the restructuring is necessary to allow for faster delivery of the devices, and forms part of its “transformation towards a solution-driven offering.”
“Our aim is to ensure the plant’s future competitiveness, and its special role as the one best suited to the production of high-value mobile devices,” said Juha Putkiranta, Nokia’s senior vice-president of markets.
It has pledged to try to find new positions for as many of the affected employees as possible, and will discuss voluntary redundancy for the remainder.