Kia Motors never planned to invest in Tamil Nadu due to its internal policy of not having a plant in the same State which houses its parent Hyundai’s manufacturing plants, the Tamil Nadu government said on Thursday, finally breaking its silence on the issue and dismissing the corruption charges.
Tamil Nadu is also contemplating action against a consultant who alleged on a social media post that Kia had moved out of the State unable to pay bribe, Atulya Misra, Principal Secretary, Industries Department to Tamil Nadu government told The Hindu.
Last month, Kia said it was investing $1.1 billion on building a manufacturing facility in Andhra Pradesh.
Following the announcement, Kannan Ramaswamy, managing director, Infratech Infrastructures Services Private Ltd, claimed in a Facebook post that the project went out of Tamil Nadu as the politicians demanded bribe.
“TN has not only lost $1.1. billion from Kia but also the allied ancillary investments of more than the Kia figure. More than that, huge employment opportunity is lost for the TN youth and auto professionals. I hang my head in shame. Let God help TN to spring back,” Mr. Ramaswamy, who claimed to be Kia’s consultant, wrote in his post.
The post attracted strong reaction in the social media, and opposition parties such as the DMK and PMK slammed the government.
Charges baseless
In an official statement, the Tamil Nadu government said the charges that figured in the Facebook post are totally baseless and done with the only intention of maligning the government.
During June/July 2016 when Kia Motors showed interest in investing in India, the Tamil Nadu government established contacts with it and discussions were also held with Hyundai, the major shareholder in KIA Motors, the statement said. “This was done to leverage the good offices of an existing investor in the State.”
Last year, State Industries Minister M.C. Sampath had told the Legislative Assembly that the State government was hopeful of Kia Motors setting shop in Tamil Nadu.
The State government’s statement also quoted the letter in September 2016 written by Han-Woo Park, CEO & president of Kia Motors, responding to an invitation from the Tamil Nadu government.
“We very regretfully will not be able to consider the State of Tamil Nadu for Kia’s potential greenfield project in India due to the business needs and requirements of our company and stakeholders, including, without limitation, geographical diversification, branding differentiation and diversification of supply channels and so forth,” the letter written in September 2016 said.
“Under such business needs and requirements of our company and stakeholders, I hope you kindly understand that we have not established our overseas plants in the same States where the plants of Hyundai Motor Company are located (such as in the United States of America, China, Europe),” Mr. Park wrote in the letter.
