Good Friend Tire Co., Ltd. has received some documents of ruling from the courthouse.
The documents of rulings request Good Friend Tire to pay back the debts it owed to the suppliers, including equipment manufacturers and steel cord producers.
A construction company also sued Good Friend Tire for liability issues.
Three Documents of Ruling a Day
The People’s Court of Boai County, Jiaozuo, Henan Province issued three documents of ruling on Dec. 11, involving 10.22 million yuan.
Dalian Rubber & Plastics Machinery Co., Ltd. applied for the enforcement of a repayment of 585,200 yuan; Shandong Jinli Tire Equipment Co., Ltd. applied for the enforcement of a repayment of 2.21 million yuan; and Dongtai Leida Steel Cord Co., Ltd. applied for a repayment of 7.42 million yuan.
Boai Court determined to froze, transfer the same amount of deposits of the debtor, Good Friend tire, in the banks, or to seal up its properties of the same value. When the properties of the company are sealed up, Good Friend Tire should be responsible for taking care of the properties.
Within five days starting from the date when the determination of property sealing up is received, if the debtor still refuse to fulfill its obligation as requested by the legal documents, the court will auction its properties by law to repay the debts.
A person in charge of the case from Dongtai Leida Steel Cord Co., Ltd. said as of Dec. 28, the company still hadn’t received the repayment from Good Friend Tire.
The person said they were waiting for the court’s execution.
However, Good Friend Tire’s creditors are more than the three companies mentioned above.
The civil judgement issued by the intermediate people’s court of Jiaozuo, Henan province, on May 19 showed that Good Friend Tire and the Third Construction Company of China Construction Eighth Engineering Corp., Ltd. had some disputes over engineering contracts.
In this case, the complaint the Third Construction Company of China Construction Eighth Engineering Corp. sued the defendant Good Friend Tire defaulting engineering project payment, valued 24 million yuan.
Finally, the court found Good Friend Tire owed the construction company engineering project payment of 18.81 million yuan, penalty of 1.60 million yuan. Good Friend Tire should also pay 143,800 yuan for the case.
“Miracles” had been Created
When Good Friend Tire was established, it had created quite some “miracles”.
The company was established in Aug. 2005 in Boai Industry Cluster, Jiaozuo city. The legal representative was Wang Liqi and the registered capital was 160 million yuan.
The company was jointly registered by Wang and a Hong Kong company to produce radial tires.
In a few years since its establishment, Good Year Tire became the largest tire company in Henan province; its products were sold to the Middle East and Southeast Asia; and it opened hundreds of sales outlets, and established partnership with FAW, DFM, and Sinotruk.
In addition, it inked a processing agent agreement with a renowned foreign company, with an annual output of 600,000 tires.
The global financial crisis in 2008 didn’t stop its development.
Good Friend Tire had made efforts in capital operation for years.
It sought for listing in the stock market and expand the tire business scale with the help of capital market.
Good Friend Tire ranked the world’s 75th largest tire company. Its sales revenue in 2015 amounted to 149 million U.S. dollars, ranked the 71th across the world.
Over the past few years, a number of domestic tire producers confronted cash flow problem, and many of them even closed down because of it.
Under present circumstances of economic downturn and tire exports being investigated for anti-dumping and anti-subsidy concerns, whether Good Friend Tire could create one more miracle is yet to be seen.
