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Last year end, StarBiz reported that Proton Holdings Bhd was being sued by its former Chinese joint-venture partner Goldstar Heavy Industrial Co Ltd in the Dongguan Intermediate People’s Court of Guangdong Province for breach of contract. By CELESTE FONG, The Star
IN restrospect, the “marriage” between Proton Holdings Bhd and Goldstar Heavy Industrial Co Ltd seemed a tad too smooth sailing – Proton and Goldstar met, fell in love, got married, and gave birth to Goldstar Proton! In March, however, Proton and Goldstar were meeting with a mediator – the arbitration court in Singapore – to work out a “divorce”. “We do not wish to defeat Proton in court,” revealed J&L Partners director Yan Baisong, the lawyer for Goldstar, in an interview with The Star. Like any marriage, Yan said, divorce is never a good thing especially if children are involved. “Goldstar only hopes to accomplish the project (manufacturing Proton cars in China),” he said. Last year end, StarBiz reported that Proton Holdings Bhd was being sued by its former Chinese joint-venture partner Goldstar Heavy Industrial Co Ltd in the Dongguan Intermediate People’s Court of Guangdong Province for breach of contract. Goldstar is seeking about one billion yuan (RM520mil) in compensation for the failed venture. Under a joint-venture proposal signed in 2002, a plant was to be set up in Dongguan to manufacture cars. In a statement, Proton claimed that Goldstar failed to obtain a licence for the joint venture within three years, frustrating its initiative to start manufacturing cars in China. In response, Yan released a letter issued by Proton managing director Datuk Syed Zainal Abidin Syed Mohamed Tahir to China’s National Development and Reform Commission (known as Fa Gai Wei in abbreviation), stating Proton’s position to withdraw from obtaining the licence for manufacturing cars in China. “Goldstar went to see Zainal in Malaysia but the appointment was cancelled in the end. He (Zainal) had instead flown to Beijing while Goldstar directors were in Malaysia for the said appointment. “Zainal has never indicated that Proton wanted to withdraw from the deal. “Nor did he come over for meetings except for one board of directors meeting held in Guangzhou. “But he never visited Humen (where the manufacturing plant is located),” he claimed. According to Yan, Goldstar had not wished to make public the lawsuit but the arbitration was held in March in Singapore. “Goldstar still hopes the ‘marriage’ will work out with Proton,” he added. Describing the “marriage” between Goldstar and Proton as perfect, like qinjinzhihao – the Chinese idiom for the amity that existed between the Qin and Jin sealed by a marriage alliance, Goldstar’s corporate communication vice-president Danny Chau said the union had the blessings of both governments. “Goldstar’s joint-venture with Proton has the support of the government of Humen Town and the municipal government of Dongguan and even the central government,” he said. “The ultimate plan is to build an auto hub in Humen and establish the town as a magnet to attract automotive industry players and auto suppliers alike. “It (this auto hub) will be Gongdong Province’s main project,” revealed Chau. Stressing that the “marriage” between Goldstar and Proton was a win-win for Malaysia, he said: “It’s now the trend, and most (auto) companies enter the Chinese market as a way to stay competitive because by manufacturing their auto parts and cars in China, they are able to cut down their costs. “The JV will help Proton cut costs and become more competitive in the market and create more jobs and economic benefits for Malaysia.” Chau added that forming the JV with a privately-owned company with government support, like Goldstar, was a smart move for Proton. “It takes at least 10 years for most foreign car makers to obtain a manufacturing licence in China,” he said. Like Yan, Chau also hopes the lawsuit would save the “marriage” and he believes the JV is planting the seeds for success and future growth not only for Proton and Goldstar but also for both countries.
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