Chinese call for tighter supervision on foreign-invested companies after ROK-invested toy maker folds

13:06, July 24, 2011      

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The sudden and unexpected closure of Donguan Soyea Toys Co. Ltd. in south China's Guangdong Province has triggered public complaints about government supervision of foreign-funded companies as the company boss from the Republic of Korea (ROK) has vanished without paying employees or suppliers.

Following a protest by more than 200 Soyea workers in front of the city government offices of Dongguan, Lichuan Share-holding Economic Cooperative, lessee of Soyea's plant, has agreed to pay most of their wages.

On hearing the news, the company's more than 20 suppliers have also begun to search for the boss. One supplier surnamed Deng said that the payment for goods in arrears amounted to 10 million yuan (1.55 million U.S. dollars).

In the past few days, these suppliers have also been to Soyea's factory in Suzhou of east China's Jiangsu Province and another subsidiary in Dongyuan, Soyea Children's Goods Company Ltd. Their efforts however have been not yielded results.

Under Chinese laws, unpaid workers rank ahead of goods suppliers when it comes to claiming assets from a bankrupt company.

Suppliers said they had informed Dongguan city government of their plight, but received no response.

Dongguan Soyea Toys Co. Ltd. last operated with 470 employees, and used to be the supplier of America's second largest retail giant Target Corporation and exported its products mainly to Japan, Europe and the United States, according to information released by the Dongguan Foreign and Economic Cooperation Bureau.

This is not the first time a ROK-funded company in China has defaulted on wages and payment for goods, and many furious Chinese have recently blogged their support for the out-of-pocket employees and suppliers.

A netizen called "Fei Fan Lao Niu" urged on news portal 163.com for the Chinese government to severely punish irresponsible foreign-invested companies. "The boss should not get out as easily as all this!"

Another netizen from Shenzhen who did not reveal his name said, "With a poor track record, ROK investors habitually run away after losing money in China."

Official statistics show that in Qingdao, a coastal city in eastern China's Shandong Province, 206 ROK-funded companies illegally pulled out of the country from 2003 to 2007, owing a total of 160 million yuan in wages and 700 million yuan in bank loans.
 
 
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(Editor:张茜)

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