Chinese Firm Jingye Group to Seek Compensation After UK Nationalizes British Steel

Kathmandu. After the British government nationalized British Steel, the Chinese Jingye Group, the former owner of the company, has announced that it will proceed with legal action seeking compensation for the investment losses it has incurred. The company claims that Britain's move has sent a negative message to the international investment environment.

In a statement issued on Sunday, the Jingye Group accused the British government of violating the principles of international investment rules and bilateral investment treaties by taking control of the company's operations. The company informed that a formal negotiation process has been initiated with the British government for compensation, and if necessary, international arbitration will also be pursued.

The Jingye Group had purchased the financially struggling British Steel in 2020. According to the company, it had invested heavily to keep the industry operational thereafter. However, the British government took control of the operations last year when the company prepared to close the blast furnaces at its Scunthorpe plant in northern England. The same industry is considered the last blast furnace-equipped center for producing new steel from raw materials in Britain.

The Jingye Group has accused the British government of offering compensation of almost zero without properly evaluating its investment and contribution. The company claims that the British government's decision has weakened the confidence of international investors, damaged the industry's operations, and ultimately added a financial burden on British taxpayers.

The UK's Department for Business and Trade, however, stated that the issue of whether to provide compensation to the Jingye Group after nationalization will be determined based on an independent assessment. According to the department, the decision to nationalize aims to save approximately 2,700 jobs and secure domestic steel production necessary for infrastructure projects and the defense industry.

The steel industry in Scunthorpe has been in production for over 130 years and is known as an important industry linked to Britain's industrial history.

Meanwhile, the Chinese Ministry of Foreign Affairs has also stated that how Britain resolves this issue will directly affect the confidence of Chinese investors in the British investment environment. The ministry has urged Britain to find a compensation solution acceptable to both parties by respecting the principles of a market economy, the spirit of contracts, and international investment rules. China has also made it clear that it will fully support its companies in protecting their legitimate rights through legal means.