Chinese regulators have fined the shareholders of a new joint venture, including one of the country’s largest carmakers BAIC Motor and the China investment arm of South Korea’s Hyundai Motor, 900,000 yuan (US$126,780) for violating anti-monopoly regulations, Yicai Global reported.
Beijing-based BAIC, Hyundai Motor Group China and Hyundai Capital Services, a provider of consumer financial services, set up Beijing Hyundai Leasing last December to run an auto financing and hiring business.
Regulations state that all groups of business operators with a global annual operating income over 10 billion yuan (US$1.4 billion) or a domestic annual operating income over 2 billion yuan ($281.6 million) in the past year must declare their combined income to the regulators, the report said.
The JV, whose income hits the quota threshold, failed to do so before obtaining its business license, the State Anti-Monopoly Regulation Bureau said in a statement on its website. Its shareholders will be fined 300,000 yuan each.
After evaluation, the watchdog determined that the joint venture will not have much impact on market competition, it added.
BAIC owns half of the JV while Seoul-based Hyundai Capital has 40% and Beijing-based Hyundai Motor Group China holds the rest. With a registered capital of 300 million yuan ($42.2 million), the joint venture received its business license on January 29.
Last year, BAIC Motors had turnover of more than 150 billion yuan ($21 billion) and Hyundai Motor sold almost 800,000 cars in China.
The fine comes on the heels of yet another major setback for the conglomerate, as Hyundai Heavy Industries, the group’s shipbuilding company, was ordered to pay a $47 million fine for illegally importing and selling dirty diesel engines in violation of American environmental rules, US authorities announced in mid-September, Economic Times reported.
Between 2012 and 2015, the company imported nearly 2,300 diesel-powered heavy construction vehicles with engines that did not meet US emissions standards, the US Justice Department said.
“Hyundai [Heavy Industries] put profits above the public’s health and the requirements of the law,” Jeffrey Bossert Clark, head of the department’s environment and natural resources division, said in a statement.
“We will not tolerate such schemes that skirt the Clean Air Act, designed by Congress to improve air quality.”
The case began with a whistleblower tip submitted in 2015 to the US Environmental Protection Agency, which launched criminal and civil proceedings.