Chinese steel giant Jingye Group demanded compensation from the UK government on Sunday, claiming the takeover of its subsidiary, British Steel, was 'outright robbery'.
The UK government took operational control of British Steel last year after owner Jingye Group warned that Britain's last factory capable of making steel from scratch was no longer financially viable.
In a statement on social media on Saturday, Jingye threatened legal action against the UK government, accusing ministers of 'trampling on international investment rules'.
Describing the nationalization as 'outright robbery,' the Chinese firm said it 'reserves all legal rights, firmly defends its lawful rights and interests, and will pursue full compensation through legal means to the very end.'
'The UK disregarded Jingye's continuous investment and significant contribution and was only willing to provide almost zero compensation,' the statement continued.
The company noted that nationalization could cost UK taxpayers more than 1.5 billion pounds ($2.02 billion) by 2028.
Jingye said it had begun a procedure under bilateral investment agreements to seek damages, without expanding further.
China's Foreign Ministry backed the compensation move, calling on the UK to 'earnestly respect market principles and the spirit of contract, and find solutions on compensation and other issues acceptable to both sides.'
After Jingye last year planned to close the blast furnaces at its plant in Scunthorpe, northern England, the UK government passed emergency measures, allowing it to take operational control of British Steel.
The government cited national security for the move, which came five years after Jingye bought British Steel from a London-based private equity firm for around 70 million pounds.
Ministers cited the need to protect strategic steel supplies for construction, rail infrastructure and defense. The move was also seen as a way to protect thousands of jobs in a deprived area of the UK.
The Scunthorpe plant currently employs about 2,700 people. In recent weeks, the UK Parliament passed legislation that allowed the government on Thursday to bring British Steel into full public ownership.
Source: www.dw.com