Joo Hyung-hwan, Minister of Trade, Industry and Energy, told lawmakers at a meeting at the National Assembly on March 20, “When Kumho Tires, which signed a share purchase agreement (SPA) with China’s Doublestar, asks for approval of sale, we will make final decision after consulting with the Ministry of National Defense.”
As Kumho Tire is also a defense company which supplies tires for trucks and fighter jets to Korean armed forces, he will consider whether China’s investment can impair production of defense-related products.
The Korean creditors of Kumho Tire signed a SPA with the preferred bidder China-based Doublestar on March 13. If chairman Park Sam-Koo of Kumho Asiana Group, does not exercise the Right of First Refusal by April 13, Doublestar is highly likely to become the largest shareholder of Kumho Tire.
Minister Joo is remaining cautious about selling Kumho Tire to Chinese company due to the fact that there have been concerns that Kumho Tire can repeat “eat and run” of Ssangyong Motor. China's Shanghai Automotive Industry bought SsangYong Motor in 2004 and stole Ssangyong's core technologies while not making any new investment for four years.