Transfarm asks SEC to deny petition of Daewoo

Transfarm and Co. Inc. (Transfarm) is asking the Securities and Exchange Commission (SEC) to deny its estranged joint venture partner's petition, Korean car manufacturer Daewoo Corp., to appoint a receiver that will start dissolution and liquidation proceedings of their joint venture firm, Transdaewoo Automotive Manufacturing Co. Inc. (TAMC).

In its opposition filed with the SEC, Transfarm said there is no legals basis for the liquidation of TMC and belied allegations of Daewoo that it has breached the terms of their joint venture agreement (JVA) when TAMC was incorporated in 1994.

"There is no basis for the appointment of an interim receiver since the grounds for the appointment are not present in this case, the property and assets of TAMC being intact and in no danger of being lost, removed, injured, wasted or dissipated," Transfarm said.

Under the joint venture agreement, Transfarm would assemble Daewoo cars at its Mandaue assembly plant and distribute the vehicles in the local market. Daewoo later however, wanted out of the contract, and has since then filed withs the Board of Investments a separate application for registration of the same car models being assembled by Transfarm.

Daewoo alleged that several provisions in the JVA were violated by Transfarm, prompting its move to go solo.

Transfarm however, refuted these accusations. Transfarm president Luis H. Quisumbing said earlier that Daewoo refused his offer to just buy out the Koreans for $20 million.

Through legal counsels, Quisumbing said there is no truth to Daewoo's allegations that Transfarm failed to complete within three years, the assemby plant for the manufacture of Daewoo cars since the incorporation of TMC in 1994. Transfarm said the JVA did not provide for a reference period within which to complete the plant. It added the non-operation of TAMC was due to Daewoo's deliberate delay in providing the debt financing facilities needed to purchase machinery and equipment. And with the Asian crisis, both parties decided to postpone operations.

Transfarm said the JVA cannot be terminated since it has not breached its contract terms by importing and selling Chrysler vehicles which Daewoo resented because it is in direct competition with its cars. Transfarm said the Chrysler vehicles targetted the high-end luxury vehicles market while Daewoo cars belonged to the People's Car Category of the Car Development Program of the BOI, thus, there is no violation in the non-competition clause of the JVA. --