Court favors GM Korea in canceling gov’t order to return technology institute subsidy

A court has ruled in favor of GM Korea Co. in a lawsuit to annul the government’s decision to retrieve its subsidy provided for a facility the carmaker disposed of in 2019, sources said Monday.

The suit was filed by the South Korean unit of General Motors Co. to annul the labor ministry’s order for it to return 2.23 billion won of residual value from the 3.25 billion won of state subsidy it received for building and operating a technology institute in Gunsan.

The project was funded under the country’s national human resource development plan for 2007-09.

The labor ministry’s order came after GM Korea sold the institute to another company in May 2019 while disposing of the Gunsan plant with local auto parts makers as part of GM’s global reorganization program.

The company claims that it is not required to return the funds since it ran the technology institute for more than six years according to related laws.

According to South Korean government regulations, businesses that operate a training facility subsidized by the state in collaboration do not have to return the subsidy after six years of operation.

The government said GM Korea misinterpreted the rules, but the Seoul Administrative Court ruled in favor of GM Korea earlier this month, stating that because the firm disposed of the facility nine years after receiving financial assistance, it had not violated the Subsidy Management Act.