Chinese tire maker Qingdao Doublestar, which recently signed on for the acquisition of Kumho Tire, said in a press release Tuesday that it will retain all current job positions of employees at the company that Kumho Asiana Group is struggling to buy back.
According to company officials, Doublestar has reached an agreement with its creditors to uphold all current job positions of Kumho Tire employees, adding that the company plans to recruit more domestic employees.
“Doublestar’s plan to hold all job positions and recruit local talents is a sign of the firm’s reaffirmation that no immediate or artificial restructuring will take place,” said the press release. “Additionally, Doublestar’s stance is to maintain Kumho Tire under independent management even after Doublestar’s status elevates to the largest shareholder.”
On March 13, Doublestar entered into a stock trade agreement with Kumho Tire creditors to acquire a 42.01 percent controlling stake in the company for 955 billion won ($853.2 million).
However, the announcement was followed by controversy as Kumho Asiana Group Chairman Park Sam-koo publicly stated last week that he plans to file a lawsuit against Kumho Tire’s creditors as he claims they had blocked the company’s purported right to form a consortium to repurchase the former affiliate.
Park says that the Korea Development Bank, one of the leading creditor banks in charge of the agreement, did not officially notify Kumho Asiana Group of its decision to disallow the company to form a consortium of strategic investors.
“We have continuously asked (the creditors) to allow us to set up a consortium for exercising our rights of first refusal,” Kumho Asiana Group said in a statement last week. “But the Korea Development Bank unilaterally decided not to allow it, without putting the matter to discussion or vote at a shareholders meeting.”
Political parties soon joined in the conflict, as the members of the Democratic Party of Korea and the People’s Party strongly oppose the Chinese conglomerate having controlling interest in the nation’s No. 2 tire maker, citing fears of technology leaking to China. Political sentiment here has soured toward Beijing over its apparent trade retaliation against Seoul’s hosting of the US Terminal High Altitude Area Defense anti-missile system.
“It is dangerous to hand over defense and industrial technology and trademark rights to China,” said Park Jie-won, chairman of the People’s Party, during a committee meeting at the National Assembly on Monday. “It would not appease (the conflict over) the THAAD system and I have my doubts over whether the move would appease China either.”
By Julie Jackson (
juliejackson@heraldcorp.com)