• By
Associated Press
A new SUV by SsangYong Motor Co. was launched at a car show in Mumbai, India, last October.

The uncertain global economy isn’t the only hurdle for SsangYong Motor to clear this year. South Korean politicians are putting up another.

Some lawmakers from opposition parties want the National Assembly to look into a possible accounting fraud by Shanghai Automotive Industry Corp., or SAIC, the previous owner of Ssangyong, which is South Korea’s fourth-biggest car maker by output. (There are generally considered to e five companies making cars in South Korea, though Hyundai and Kia have the same parent company.)

The lawmakers argue SAIC artificially or wrongfully boosted its losses in order to enter a bankruptcy court and exit their ownership of Ssangyong. They also say SAIC ran away with core technologies without making an investment in SsangYong.

SAIC gave up the company, which it had bought for about 600 billion Korean won ($550 million)  in 2004, when the bankruptcy court took over control of SsangYong in 2009.  Mahindra & Mahindra of India acquired the company for 523 billion won in 2010 and SsangYong graduated from court protection in 2011.

In January, Mahindra & Mahindra said it will invest more than 1 trillion won in the next four years in SsangYong. In the past two years, it already injected 350 billion won in its South Korean unit to launch several facelift models such as the Rexton W sport-utility vehicle and the 11-seat Korando Turismo recreational vehicle. SsangYong aims to sell 149,300 units this year, up 24% from a year earlier.

SsangYong’s operating losses narrowed to around 90 billion won last year from 145 billion won a year earlier due to increased exports to emerging markets such as Russia and Chile.

SsangYong and its union say they don’t need the hassle of a parliamentary investigation and believe they are embroiled in political strife between the ruling and opposition party. The ruling Saenuri Party initially agreed with the idea of a parliamentary probe last year but changed its tune last month.

“Opposition lawmakers are making use of SsangYong’s past case in order to attack the ruling party,” SsangYong Motor union leader Kim Kyu-han said in an interview. He said the politicians are “not helping the company but shaking it.”

SsangYong Motor President Lee Yoo-il said the company is having a difficulty in negotiations with dealers to raise prices due to a political dispute that “has nothing to do with the company’s business.”

Some dealers expressed concerns that the political strife is making it difficult for the company to move forward.

“We’d like to leave the past in the past, and focus on the bright future,” said Deon Cooper, a dealer from New Zealand where sales of SsangYong’s vehicles soared by 300% a year in the past two years.

For the politicians, part of the issue is that the auto company hasn’t rehired several hundred workers who were laid off while it went through bankruptcy.

The politicians themselves have done little to help Ssangyong’s business, ironically. Most members of the National Assembly use cars from Hyundai Motor Co. and Kia Motors Corp., the country’s two major car makers.

The political clouds over SsangYong won’t likely blow over soon.

The United Progressive Party and the Progressive Justice Party, two minor opposition parties, said they will continue to go ahead with a parliamentary probe of SsangYong even after the new Park Geun-hye government comes to power late this month.

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