Sichuan Tengzhong Heavy Industrial Machinery Co. Ltd. (Tengzhong), who intends to buy General Motors Corp's Hummer, is reported to have a financial problem. Sichuan Mayi Xiongbing, a local mechanical and electrical products company, accused Tengzhong of deliberately defaulting on payments totaling 470,000 yuan.
Mayi Xiongbing held a board meeting yesterday morning to discuss how to address the situation. According to the agreements handed out at the meeting, Tengzhong has failed to pay installments on a 280,000 yuan debt since June last year.
In August, the two companies signed another contract worth 150,000 yuan. Despite the payment default, Mayi Xiongbing continued the partnership, pointing out a cooperative relationship in the past.
On a letter dated January 14, 2009, Tengzhong expressed its regret for payment default and promised to pay after beginning a new project. Tengzhong broke the agreement again, even after the two sides signed a payment agreement on March 30.
A lawyer representing Mayi Xiongbing said the board decided to issue an ultimatum to Tengzhong. "We will take Tengzhong to court if they still fail to pay," said the lawyer, surnamed Kuang.
According to a manager surnamed Lei, who is in charge of business with Tengzhong, there are other suppliers urging Tengzhong to pay their defaults. "The business ran smoothly in the past few years (between Tengzhong and Mayi Xiongbing)," said Lei. "But it's getting harder (to receive payment). Sometimes I can't even meet the people in charge.
"Most of time they said they didn't have enough money on account and were waiting for the allocated funds from the headquarters."
Yesterday afternoon, Lei had a one-hour meeting with Zhang, a deputy general manager of Tengzhong. Zhang admitted the company had a tight bankroll and promised to pay 100,000 yuan in the afternoon and would pay off remaining 370,000 yuan in half a month.
The offer didn't satisfy Mayi Xiongbing, however, and the company said it would start legal action against Tengzhong.
(China.org.cn by Huang Shan June 16, 2009)
