Volvo’s new Chinese partner Dongfeng has been blacklisted by a Swedish state pension fund as it has illegally sold military equipment to embargoed nations, reports the Swedish news programme TV 4 Ekonominyheterna.
“They are really the wrong partner for Volvo,” said Anna Ek, head of the Swedish Peace and Arbitration Society, to TV 4.
At the weekend, Volvo announced that it had purchased a 45 per cent share in Dongfeng Commercial Vehicles, a new subsidiary of the Dongfeng Motor Corporation. The deal, which was worth nearly 6 billion kronor, sees Volvo become the world’s largest maker of heavy-duty trucks.
It was Sweden’s Seventh AP fund that blacklisted Dongfeng after it illegally sold military equipment in 2007 and 2008. The blacklisting means the fund will not purchase any shares in the Chinese company.
Volvo says that it has addressed the issue with its new partner.
“We have told them what we think and they told us that they do not work in this way anymore,” said Kina Wileke, head of media relations at Volvo, to TV 4.
Volvo becomes world's largest truck manufacturer