Geely (China) Refuses To Pay Debts In Urals

30.10.2009 — News

THE SVERDLOVSK OBLAST.

Activities of China's Geely Corporation may become a subject for a high-profile political discussion. The Urals Presidential Envoy Nikolay Vinnichenko has been informed of the Chinese company's debt to CJSC Automobiles and Motors of the Urals (AMUR) amounting to a million dollars. 

In 2007-2008 the Urals company was assembling Geely cars. In November 2008 due to the raise of Russian customs duties on imports of painted automobile bodies by 15% the production was rendered unprofitable and the assembly was stopped. One million dollars paid by AMUR for the components which had not been shipped yet by that time had remained in the account of Geely International Co., Ltd. The company informed RusBusinessNews that all attempts to get the money back were in vain.

CJSC Automobiles and Motors of the Urals is experiencing serious financial problems. The company is behind in paying wages by 42 million roubles, 19 million out of which is compensation for idle hours. The company's management approached the Sverdlovsk Oblast government and federal authorities seeking help in the negotiation with the Chinese counterpart.

The Chinese company Sinotruk has found itself in a reverse situation in the Urals. It is trying to get back 14.5 million roubles owed by StroyDorMash Ltd. for the purchased trucks through courts.