India’s Mahindra worried about reignited Ssangyong controversy

Mahindra & Mahindra Ltd., the owner of Ssangyong Motor Co., is concerned about the recent parliamentary debate on Ssangyong’s mass layoff in 2009, but has no immediate plans to reinstate fired workers, a local business organization said Monday.

Faced with a severe liquidity crunch, Ssangyong Motor, the smallest carmaker in South Korea that specializes in sport utility vehicles, was forced to lay off 2,600 workers, or 37 percent of its workforce, in August 2009.

“If the restructuring in August 2009 at Ssangyong were to turn out to be illegal, which would mandate the reinstatement of workers, it would fundamentally put the legitimacy of the acquisition in question,” the Korea Employers Federation quoted Pawan Goenka, president of the Indian firm, as saying in a letter to Rep. Shin Geh-ryoon of the Democratic United Party.

He said it is a “matter of serious concern.”

The disclosure of the letter came after a parliamentary committee last week, presided over by Sin, held a hearing on the layoff issue, into which some opposition lawmakers have demanded a parliamentary audit.

Ssangyong had been under court protection since its former Chinese parent, Shanghai Automotive Industry Corp., abandoned it in early 2009 before Mahindra took over the ailing South Korean automaker in 2010.

“Mahindra & Mahindra Ltd. acquired Ssangyong following a transparent and ethical process in accordance with the procedures and requirements set forth under Korean law. The process was legally flawless,” said Goenka.

He said Mahindra is considering reemploying the fired workers but normalization of the carmaker should have priority over other things.

“Clearly, you will agree that rehiring of workers will have to be affordable based on the business conditions of the company,” he said. “We are also fully committed to reinstating the unpaid leave workers gradually and continue to support them in the interim through several measures as already announced.” 

(Yonhap News)