Shanghai Automotive Industry Corp said it would protect its legitimate rights in defending itself against a lawsuit filed by smaller shareholders of its South Korean unit, Ssangyong Motor Corp, who are seeking 1-billion-won (US$730,000) compensation.
"We feel regretful about the investment environment in South Korea," SAIC, China's biggest car maker, said in a statement. It hasn't received any official notice of the suit yet, the statement added.
Ssangyong's smaller shareholders accused the company's former executives, including SAIC President Chen Hong, and SAIC of illegally transferring technologies and leading Ssangyong to bankruptcy protection in January. They alleged that SAIC failed to keep its promise to invest US$1 billion in Ssangyong when the Chinese car maker bought the South Korean car maker in 2004.
Ssangyong, 51 percent owned by SAIC, was taken over by the bankruptcy court after the financial crisis triggered a sales slump and a liquidity crisis.
SAIC earlier said it would work with all parties, including the government and labor unions to normalize Ssangyong's operations and help it ride out the recession after the unions rejected its restructuring proposal which included job cuts and cost reduction.
SAIC also dismissed allegations that it stole technologies from Ssangyong. "All the technology exchange after the merger were based on contracts, which are in line with international practice," SAIC said, adding it focuses on hybrid gasoline engines rather than Ssangyong's hybrid diesel engines.
(Shanghai Daily April 2, 2009)
