It has been confirmed that the remark by India's Mahindra Group chairman that he will invest 1.3 trillion won in the next three to four years in Ssangyong Motor does not mean direct investment.
While meeting President Moon Jae-in who made a state visit to India in July, Anand Mahindra, chairman of the Mahindra Group, said, "So far, the group invested 1.4 trillion won in Ssangyong Motor and make an additional investment of 1.3 trillion won in the coming three to four years as part of its efforts for the motor company's sustainable growth."
However, it was found that the Mahindra Group will not invest cash in Ssangyong Motor but reinvest Ssangyong's earnings into the motor company. A high-ranking official of Ssangyong Motor recently said in an interview with Oh My News, "The chairman's remark means the company's investment to come, not direct investment of 1.3 trillion won."
This means that Ssangyong will not receive the money from the Mahindra Group, but will provide it on its own. Whenever the Mahindra Group revealed its plan to invest in Ssangyong, some media and markets mistook it as direct investment. Some critics say that it is not a direct investment and it is just a condescending remark.
Ssangyong officials, however, say the investment is clear because its own funds are being used to develop new cars and new technologies instead of paying dividends to major shareholders.
Meanwhile, Ssangyong`s labor union stressed that only if the Mahindra Group invests more aggressively, such as capital increase, the company can get out of the chronic deficit. Ssangyong`s share price skyrocketed in July when the chairman mentioned his investment.
