- Jingye Group has demanded compensation from the U.K. government for investment losses following the nationalization of British Steel, claiming the state takeover was 'outright robbery.'
- The Chinese Foreign Ministry has backed Jingye's compensation move, urging the U.K. to respect market principles and find acceptable solutions regarding compensation.
- Jingye Group purchased British Steel in 2020 for around £70 million and claimed to have saved the company from crisis.
- In 2022, Jingye warned that the Scunthorpe plant was no longer financially viable, leading to the U.K. government's emergency measures to take operational control.
- On July 17, the U.K. government took operational control of British Steel, which has been producing steel in Scunthorpe for over 130 years.
- The U.K. Parliament has passed legislation allowing the government to bring British Steel into full public ownership, with an independent evaluation to determine compensation.
Jingye Group, the Chinese company that acquired British Steel in 2020, is demanding approximately £1 billion in compensation from the UK government following the nationalization of the steelmaker. The firm claims the government's actions have resulted in significant financial losses and have damaged the credibility of international investments.13
In a statement, Jingye described the nationalization as 'outright robbery', asserting that it 'reserves all legal rights' and will pursue full compensation through legal means. The company emphasized that the UK government's actions disregarded its continuous investment and contributions, offering almost zero compensation in return.
The UK government took control of British Steel last year, citing national security concerns after Jingye warned that the plant was no longer financially viable. The nationalization could potentially cost UK taxpayers more than £1.5 billion ($2.02 billion) by 2028, according to Jingye.
The Chinese Foreign Ministry has backed Jingye's compensation claim, urging the UK to respect market principles and find mutually acceptable solutions. Jingye has initiated negotiation procedures under bilateral investment agreements and is prepared to pursue international arbitration if necessary.2
An independent evaluation will determine if any compensation is payable, as mandated by new legislation passed by the UK Parliament. Jingye's operations at the Scunthorpe plant have reportedly been losing around £700,000 per day despite an investment of £1.2 billion.4
“Jingye accused the UK of 'outright robbery' and said nationalization could cost UK taxpayers over £1.5 billion by 2028. China's Foreign Ministry backed the move, urging the UK to respect market principles and find a compensation solution acceptable to both sides.”
AP News
dw.com
