Kia is preparing to take the Slovak government to court after it refused to provide state aid for its suppliers, according to Reuters.
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Kia’s EUR 1bn plant (US$1.1bn) in the north of the country has a contract to receive 9.9 billion crowns (US$315m) in incentives. However, the government has rejected the payment of further incentives worth 660 million crowns to 10 Kia suppliers, which Kia says were promised as part of the overall investment deal.
The economy minister has said no formal deal was signed and blamed his predecessor for making promises that could not be kept. New rules on state aid to foreign investors have come into force since Kia decided to locate its plant there. The suppliers do not qualify for incentives under the new rules, although Kia said the government had already agreed to them.
Reuters noted that Korean tyre maker Hankook decided to switch a EUR500m investment from Slovakia to Hungary after the Slovak government turned down an investment package.
