MG Rover says a report in today’s Daily Telegraph suggesting the demise of its proposed partnership with Brilliance China Automotive Holdings is “completely wrong” and “categorically denied”, according to press and public affairs manager Katie McPhilimey.
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The Telegraph, the UK’s respected top-selling ‘broadsheet’ national daily newspaper, said: “MG Rover’s dream of securing its future in China looked in tatters yesterday as a Chinese provincial government signalled its determination to oust the chairman of its local partner, Brilliance China Automotive.
“Chairman Yang Rong, the former central banker who founded Brilliance a decade ago, was yesterday struggling to prevent the government of the northern province of Liaoning from seizing a 48% stake in Rover’s new partner.”
However, today’s South China Morning Post (SCMP) said Brilliance had rejected reports that its holdings in mainland car-making assets would be taken over by the state while vice-chairman Wu Xiaoan said his company’s stake in the assets remained unchanged.
“This is purely nonsense … if this were the case, we would have notified the stock exchanges and issued company announcements on that,” Wu told the South China Morning Post. The stock slid 6.94 per cent to close at HK$1.34 yesterday after reports on the ‘takeover by the state’, the newspaper added.
The SCMP said that Brilliance shares came under heavy selling pressure in Hong Kong after reports that Chinese officials were determined to grab control of the car and minibus manufacturer in return for giving approval to former Rover parent BMW to set up a new plant in the provincial capital of Shenyang.
According to the South China Morning Post, the reports first appeared in the Guangzhou-based gossip newspaper Southern Weekend last week and were later run by the official China Securities Times and mentioned by a prestigious local Chinese business newspaper called the Hong Kong Economic Journal.
The SCMP said that Southern Weekend quoted a car industry source in Shenyang city as saying that the Liaoning provincial Government had set up an ad hoc group to take over Brilliance China’s assets.
The Daily Telegraph said: “The clash with the Liaoning government amounts to a devastating reversal of fortune for Yang and could rob MG Rover of the deal-maker who had promised the company its first opportunity since the 1950s to be a leading player in the world’s fastest car market.”
The newspaper added that there have been some doubts about the venture since it was launched last year with neither MG Rover nor Brilliance able to detail a timetable for the start of operations.
Suo Yan, a spokesman for Brilliance China, told the Daily Telegraph yesterday that, so far, there was “no concrete cooperation” between the two companies.
