Ssangyong dismisses fraud allegations
A worker examines a vehicle on an assembly line at Ssangyong Motor’s Pyeongtaek factory in Gyeonggi Province. / Courtesy of Ssangyong Motor
By Kim Tae-jong
Ssangyong Motor said it strongly opposes any move motivated by political intentions to distract efforts underway to normalize its business, and refuted recent allegations that the company manipulated its accounts to show reduced revenue in order to justify large-scale restructuring in 2009.
“Investigations by the financial authorities and courts have already proved that the accounting forgery allegation was groundless,” an official from the firm said. “Please, just let us alone to focus on the recovery of our business.”
The remark came as some opposition lawmakers and labor groups claimed earlier this month again, that they obtained new evidence to show that the company fabricated its financial statements and by omitting assets to support artificial reasons to lay off employees when it was placed into court receivership four years ago.
During the restructuring, the firm got rid of 2,600 workers. Of them, 455 workers took leave of absence without pay on condition that they would be reinstated when the firm’s business normalized. Some 1,900 chose to retire and the rest were dismissed. The huge layoff sparked a 77-day strike at the automaker’s Pyeongtaek factory, which disrupted the carmaker’s production for months.
The recent allegation has led both ruling and opposition parties to agree to create a subcommittee under the National Assembly’s Environment and Labor Committee to further discuss the issue.
But the automaker strongly denied their claims, arguing that the new evidence is “nothing but a misunderstanding and a lack of understanding of the related material and the business conditions of Ssangyong Motor.”
“The content of the material that was presented as if it was a new fact was referred to due to confusion over an audit statement and a footnote in the audit report. We would like to emphasize again that the reduced amount of tangible assets reflected in the financial statements was rationally calculated following accounting principles,” Ssangyong said in an official statement.
Deloitte Anjin, a local accounting service firm responsible for the Ssangyong case, also refuted the recent allegation, saying that the final audit statement and the audit report are consistent in their figures.
Ssangyong also made it clear that the request for a National Assembly investigation would only cause damage to the automaker, which has been making efforts to achieve a turnaround as soon as possible.
In fact, the firm is now in a better shape since it was taken over by new Indian owner Mahindra & Mahindra, although it has yet to reach a peak performance. In 2012, the firm’s sales climbed 6.8 percent year-on-year to 120,717 vehicles, and it expects to sell about 150,000 vehicles this year.
“We strongly oppose the politicization of this issue based on groundless allegations. It will only give us tremendous difficulties in turning our business around and damage our brand image and international reputation,” the Ssangyong official said.