Tengzhong Heavy Industrial Machinery, the black horse that emerged earlier this month as a bidder
to acquire the Hummer brand from bankrupt GM is being charged for defaulting on construction cost of RMB 470,000, a local news paper reported this week.
Sichuan Antz Mechanical & Electrical Corporation, an affiliated company of Chengdu Ant Group, signed service contract with Tengzhong for 280,000 in June 22, 2008 and 150,000 in August 28, 2008. Tengzhong defaulted on the installment payment which should have began after the completion of the project in June 30, 2008.
Maeil Business Newspaper reported that Tengzhong wrote to Antz regarding the installment. The paper learned that Tengzhong failed to pay the RMB 510400 which was due to the financial crisis. Tengzhong promised to pay it back after another project began.
However, Tengzhong still didn’t fulfill that promise. The two sides signed another agreement on payment in March 30, and Antz asked Tengzhong to pay installment of RMB 470,000. Tengzhong broke the promise once again.
According to project manager Lei, there was no problem to gather the funds from Tengzhong in previous years. Now it was quite difficult to get the money paid from the, however.
“Sometimes I have to wait for hours to see the person in charge; even when I find them by chance, they would say we should wait as there is no money in the bank account.” Said Lei said. “You just couldn’t get your money back.”
Lei was not alone. A number of other collectors also came to light, including steel suppliers and builders.
“We thought there might be hope for us to collect our money when media reported that Tengzhong is to acquire Hummer,” Lei said.
Tengzhong has made no official comment regarding this matter.
Antz told reporter that they would resort to law to collect the money from Tengzhong.
(RMB 1= USD 0.146331)