Deadly riot by China steelworkers scuttles merger

BEIJING - A steelworker riot that killed a company executive in northeastern China has scuttled plans for a merger between a giant state-run plant and a private Beijing firm, two officials said Monday.

An emergency notice announcing the end of the deal was made Friday after thousands of steelworkers clashed with police in a protest over plans by Beijing's Jianlong Group to take a majority stake in the state-owned Tonghua Iron and Steel Group.

The official Xinhua News Agency and other state-run media reported that workers beat Jianlong executive Chen Guojun to death Thursday outside the plant in Tonghua city, Jilin province, after he announced that only 5,000 out of 30,000 workers would be retained after the merger.

A similar account of the unrest was reported Saturday by the Information Center for Human Rights and Democracy, a Hong Kong-based monitoring group.

A woman with the Jilin provincial State-Owned Assets Supervision and Administration Commission confirmed Monday that the commission intervened Friday, barring Jianlong from taking any stake in Tonghua. She refused to give her name or other details.

An official with Tonghua's administration office who would give only her surname, Zhao, confirmed receiving notice from the commission. It said Jianlong was no longer to be involved in Tonghua's restructuring, she said Monday.

Beijing is trying to streamline China's sprawling steel industry, the world's largest, by orchestrating a series of mergers aimed at creating globally competitive producers. The mergers often are accompanied by layoffs that sometimes spark complaints that workers receive too little severance pay.

The protest forced the steel plant to shut down for 12 hours on Friday, but operations have been back to normal since Saturday, Zhao said.

The China Daily newspaper said crowds dispersed after the announcement about the end of the deal was made.

Jianlong had a stake in Tonghua since 2005 but suffered losses after steel prices dropped and jettisoned the company, the paper said. It said Jianlong revived the takeover plan after steel prices rebounded, making the business profitable again.

Both Xinhua and China Daily reported that workers also blocked ambulances, police and government workers who had tried to rescue Chen.

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